Who would have thought that a business transaction in the parking industry would involve the number $1.5 billion? What venture capitalist would consider dropping that kind of change to purchase a parking operator? It boggles the mind.
Yet, apparently it has happened.
Four years ago Reef parking appeared on the scene and using nearly a billion purchased more than half a dozen operators. I’m not certain just how all the hype at the time turned out, but the concepts of ‘changing’ parking and converting garages to kitchens to assist Grub Hub and the like in their ilk in food delivery have not appeared to be overly successful. I remember one operator calling me and asking about the spending spree. He wanted to know if he should consider himself “prey.” That having been said, Reef is one of the largest operators in the country.
What we have seen this week is different. Metropolis has attracted the capital and signed an agreement to purchase SP+. SP+is one of the larger companies in the operator business, with 3300 locations and 160 airports under its umbrella. Metropolis has some unique technology running around the country that can replace much of the revenue control equipment in those 3300 locations doing away with credit cards and cash, and many of SP+’s 20,000 employees.
Wags in our industry are predicting that this could cause a paradigm shift in how parking is run in commercial operations. It appears doubtful that it will affect university or on street municipal parking, at least in the short run.
However, if your add together the other larger operators (LAZ, ABM, Reef, and Ace) you come up with over 11,500 locations. I seriously doubt if those companies and the hundreds of other smaller operations around the country are going to go quietly into that dark night. These companies have shown themselves to be able competitors to SP+
I will say that Alex Israel’s Metropolis is not a company to be sneezed at. It was just over five years ago that four people sat around their dining room table and began work on the ideas and technologies that became Metropolis. In those five years it grew to 450 locations and enough technology to attract more than a Billion and a Half in VC money. That is impressive.
It will be fun to watch what happens next year at SP+. It will go from a public company to a privately held company with a focused CEO who has proven successful. You can only wish them the best.
JVH
