Multi-Solution™ in Action: Next Parking Weathers the Pandemic Through Diverse Revenue Streams
For more than 20 years, Next Realty has actively invested in and asset-managed parking facilities across the country. From the East Coast to the West, surface lots or full-service parking garage management, the Next Parking division has been at the forefront of anticipating the trends and needs of both workplace commuters and leisure parkers, providing automated contactless systems for maximum safety.
Parking is a niche-oriented asset with unique day-to-day and long-term operational opportunities and challenges. There are, however, some consistent themes at Next Realty that are as critical in parking assets as they are for any other property. These include operating under the precepts of Location, Liquidity, Luck® and relying on our team of Nextperts®, those who have specialized backgrounds and experiences, to execute sound parking acquisition and management strategies.
Adhering to our Multi-Solution™ strategy is important in good real estate cycles, but is even more critical during Black Swan events, like the COVID-19 pandemic. Next Parking has demonstrated that a continued commitment to our core strategies is an essential step in our ability to guide the emergence of our parking assets from the pandemic:
- Town Square Garage is a 498-space parking garage in downtown St. Paul, MN. The success of Town Square comes from its unique subterranean position downtown with connections to 3 million square feet of office space and 251 hotel rooms. Typically, this creates a natural flow of demand, but the combination of the pandemic and the unrest in the Minneapolis/St. Paul downtown area brought transient and hotel parking to a standstill. However, Town Square still provided operating income from monthly parking leases that were in effect prior to the pandemic.
- Seagrove Lot is an automated surface parking lot in Del Mar, CA near San Diego with capacity of up to 150 cars during peak summer season. The lot has a highly desirable location across the street from Seagrove and Powerhouse Parks, with direct access to the public beaches of Del Mar and two of the area’s best-known restaurants.
Next has no debt-service obligations and maintains strong cash reserves, which provided great protection when the pandemic lockdown went into effect. As restrictions began to lift, localized outdoor activities were among the first to be allowed. Residents in the area flocked back to the beaches, which resulted in a very successful reopening for the property.
- Metropole Condominium Garage is the publicly available parking portion of the Metropole Condominium Garage in Washington, D.C. It contains 73 parking spaces located under the residential condominium complex.
Next had a guaranteed lease with an operator through 2024. Due to financial issues caused by the pandemic, the operator terminated its lease nearly 3 years earlier than expected, at no cost to Next. The transfer of operations allowed Next to gain full management control of the property and hire a replacement manager under an operating agreement that was much less restrictive than the prior lease.
Operationally, Next was able to advance the installation of automated parking equipment to establish contactless payments and data analytic capabilities which allowed for immediate event rate schedule changes. Additionally, Next was able to implement rate and operational changes because the facility was no longer under the restrictions imposed by the previous lease arrangement. The impact of this operational freedom was recently demonstrated when D.C. re-opened and hosted a Pride Parade. Next strategically enacted a special event parking rate that was financially successful and put the firm on track to beat historical operating revenues for the period.
These case studies within the parking portfolio illustrate how the Next Multi-Solution™ strategy, the concept of Location, Liquidity, Luck® and our Nextpertise® converge to make Next Parking operations successful, even during times of strife.
