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InterFace Panel: Parking Spaces Present New Opportunities for Developers

Approximately 225 retail professionals gathered at the Royal Sonesta Hotel on April 18 to discuss the current and future states of Houston's retail real estate market.

Approximately 225 retail professionals gathered at the Royal Sonesta Hotel on April 18 to discuss the current and future states of Houston's retail real estate market.

HOUSTON — As e-commerce continues its siege of brick-and-mortar retail, shopping center developers in Houston are re-evaluating and repurposing the space currently allotted for parking. Virtually all centers are seeing reduced need for parking space, which creates opportunities to reclaim that space for more efficient uses, like adding another in-line store.

At the InterFace Houston Retail conference on April 18, moderated by David Luther of Marcus & Millichap, industry experts spoke at length about how retail developers are cutting their parking allotments in strip centers and power centers alike, largely because of convenience-oriented technologies.

Apps like Postmates and TaskRabbit have made it possible to outsource running errands to other people. Online grocery delivery services like Instacart and Shipt allow customers to do their shopping with a few quick clicks. Even Uber has gotten into the game with delivery features like UberRUSH for errands and UberEATS for meals.

According to Tom Lile, president of retail development firm Gulf Coast Commercial Group and a conference panelist, such products and services have already begun to influence Houston developers’ thoughts on parking.

“Fifteen years ago, if you were building a power center, you absolutely had to have five parking spaces per 1,000 square feet of gross leasable area across the entire project,” Lile explained to 225 retail professionals enjoying breakfast at the Royal Sonesta Hotel. “During the downturn, retailers realized they could live with four per 1,000 instead, and I think that number’s going to continue to come down.”

Lile added that some of his company’s current projects are designed to include drop-off and waiting areas for Uber and Lyft vehicles.

Lisa Helfman, director of real estate for Texas-based grocery chain H-E-B and a speaker on the conference’s second panel, is taking a “if you can’t beat them, join them” approach to the online competition. The company recently launched H-E-B Curbside Pickup to shorten shopping times without completely eliminating customer interaction. While Helfman views this interaction as integral to a positive shopping experience, she recognizes implications for parking requirements.

“Curbside pickup should ultimately relieve parking in centers, because people will only be there for 10 minutes instead of an hour,” said Helfman. “But this is the future. Eventually we will put curbside pickup in every single store.”

Charles Scoville, COO of developer Read King and another conference panelist, noted that some office and mixed-use developers have already begun changing their parking structures in anticipation of having fewer cars in spaces.

“Some of the office and mixed-use guys are already going with flat decks instead of angled decks and speed ramps,” said Scoville. “They’re also going with higher clear heights so that when the day comes, they can make the transition.”

Scoville explained that angled parking structures use land efficiently, but unlike flat decks, they can’t be repurposed when parking volumes decline and usually have to be torn down. Parking areas with low clear heights pose the same problem.

So, while e-commerce may be forcing developers to cut parking spaces, it’s also enabling property owners to reclaim that space for additional tenants, perhaps leveling the competition in the war between online and brick-and-mortar retail.

— Taylor Williams

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