What cap rate would you assign to a parkade in a downtown core? It’s in Alberta but still interested to hear opinions from other geographic locations.
Are you talking about parking rates - daily cap or monthly cap?
If you’re a buyer: as high as the market will bear.
if you’re a seller: as low as the market will bear.
cap rate as in the rate of return on the asset
Why don’t you ask a broker for some comps?
Turd is right, you’ll need to find some local comps via a broker. Parking rates in Calgary are insane (most expensive in North America next to Manhattan) and spots are limited by law, so I imagine if in Calgary you’ll be paying up big for a downtown parkade. Edmonton is far less lucrative. My two cents: be careful to look at utilisation rates in the last few months if in Calgary. Less folks commuting downtown these days, and if its not a prime lot always at capacity, then someone might be trying to fetch a premium that might be hard to recover in today’s market.
How much is a “normal” monthly contract rate in Calgary?
Underground will run you $550-650 downtown unreserved. Deals to be had sometimes, but that’s general rate. When I last worked downtown, my building charged $775 and there was a two year wait list. The city limits downtown parking spots to road capacity to limit gridlock, and the city isn’t building more roads. So parking capital is incredibly restricted and very scarce. Even if you’re willing to shell out $500+ you might be wait listed for several months or more.
Wow. Free market in action I suppose, but driven by odd government policy. In downtown Houston, contract parking is usually between $80-175 a month depending on the garage and if you’re willing to take a space on a high floor. Energy companies have typically paid for this, but $40 oil, that might begin to change. Thankfully I haven’t had to work downtown in nearly 4 years. I liked the food/drink options downtown but they have completely destroyed traffic management down there with these new idiotic light rail lines that nobody uses.
$500 parking is not free market in action, it’s what happens when government limits supply. houston has no zoning and lo and behold their rates are a small fraction.
But Houston is an ugly city!
an ugly, thriving city.
Eh, we will see how thriving it is at $50 oil. There have been some visible cracks so far
It’s not the 1980s anymore. Though to be fair I wasn’t here, or alive for that matter, during the oil bust of the 80s.
I wouldn’t be surprised to see a slowdown, but after the last few years that would just be a slowdown to a “normal” growth rate for any other city. Also, market turbulence creates lots of startups and new shops that wouldn’t have existed had oil stayed at $100 forever.
Sure it’s not the prettiest city in the world, the roads have lots of potholes, and it’s young attractive females tend to quickly marry dickheads that went to UT/A&M, but I’d argue there are few, if any, cities in the US that provide a better ratio of compensation to cost of living and tax burden, particularly for youngish professionals. Beyond the financial benefits, the weather/lifestyle and stuff to do is just as easy to find here as it is in Chicago/Boston/etc. All cities I like, but they’re effing expensive and cold. Both of which are deal breakers for me, until somebody offers to double my compensation!
krazy beat me to it, but I was going to say that Houston is pretty well positioned even with cheap oil for several reasons. I’ll add that it has built out an amazing amount of logistics infrastructure over the last decade or so and is now a global trade gateway.
Can’t believe Calg is 800$/mo parking.
How’s the public transport there these days?
^ Its much improved in the last decade. We have four pretty heavily used light rail lines and plans to add two more. It’s certainly not a world class public transportation network, but its pretty good for a 1.2 million metro population.
Yea, that’s what the Houston Chronocile would lead me to believe. But then I see trends in single family, vacancy rates, and the amount of commercial construction about to come online and the impact of the stuff that has come online recently. . … Life isn’t binary – it isn’t 80s crash or nothing happens. But i don’t want to derail this thread on Houston analysis lol