Are Parking Investments Right for Syndications or JVs?

[Michael Bell]

Greetings BP,

I wanted to share my parking "activities" within the BP community since I see this a pretty obscure topic. 

Overall, my goal is to JV on, and eventually partner with a GP to syndicate, a parking lot and/or structure by year's end.

Income generating parking lots and structures located in Central Business Districts and entertainment areas have the ability to provide stable to provide stable returns with low capital expenditures.  This niche is highly fragmented and poised for consolidation given the right strategy is applied.

To provide context, please consider the below activities:

I have written a couple other posts about parking and will continue to do so to chronicle my parking experience. I strongly follow the abundance mindset and believe the more I share the better I am for it.

Over the past 6 months, I have explored the parking niche with great enthusiasm. I have been searching for parking deals for an experienced investor.  This opportunity has allowed me to not only gain great knowledge about parking, but commercial real estate as a whole. I have also begun to set the stage to do my own parking deals.

My target lots and garages are in secondary or tertiary markets located in the Midwest, Northeast, or South. Primary targets are located in cities (100k+) with positive population growth over the past five years; possessing easily identifiable macroeconomics. Within those cities, I am targeting assets in central business districts (CBDs) and popular entertainment areas where large amounts of people congregate daily. Essentially, there must be a paid parking footprint in the area already.

The ideal asset would cashflow from day one with the ability to add value via technology, operations improvements, and/or NN lease addition (or renegotiation).

I am targeting parking garages less than 25 years old, with no major structural issues, and busy street access (with easy ingress/egress). First floor commercial is a plus to help increase value. I do not have an age requirement for parking lots; the location and surrounding competition are my main concerns.

* A bonus play would be purchasing a small commercial property with at least a 25 space lot in the aforementioned areas; the idea is to convert the lot into paid parking to force appreciation.

I have learned that self management
 is not advantageous to most parking owners. Relying on parking companies to manage and improve your "product" is paramount. Below you will find a list of my activities over the past 6 months as well as my intended actions for the next 6 months.

***What I have done so far***

- I created a database of over 300 "mom & pop" paid lots spanning 27 cities. This took me about 6 weeks since there was no easy way (trust me, I tried) to find the lots.

- I was able to get approved for access to private investigator software to find the true owners of these properties since conventional skiptracing produced poor results. Over time I have dwindled that 300 owner list down to approx. 200 owners that I have sent 3 rounds of direct mail to this year. Response rate has increased each time. 1st round only one callback; which translated to one offer and no deal. 2nd round 5 callbacks; one offer (cold call); and no deal. 3rd round (just went out), 2 callbacks so far.

- Last November, while researching the parking industry, I came across a non-profit organization called Veterans in Parking (ViP). They are dedicated to connecting veterans to jobs in the parking industry. Since I am active duty Navy with a recruiting and personnel background, I decided to reach out to see if I could help out in some way. I figured at the very least it would be a great opportunity to network with veterans in the parking industry, find a few jobs to pass to my Sailors, and I might even get a lead on a deal.

After a series of phone calls and emails, Veterans in Parking subsequently offered me a seat on their board of directors; which I accepted. To date, I have created two strategic partnerships with other veteran organizations to match veterans with parking industry jobs of varying skill levels.

- In addition to cold calling and mailing directly to owners, I have also engaged with parking operators at the corporate and regional director level in order to generate leads. I was able to connect my mentor with a CEO, COO, and Chief Development Officer all from different parking companies. This has generated a good amount of leads but no deal as of yet. I strongly believe networking with the parking industry is the ideal way to generate off market leads. They know the ins and outs of the industry, my target locations, and the micro-nuances of each submarket.

***What I am planning to do***

- Continue the aforementioned activities to find a parking lot or garage for my mentor to close on.

- Another yearly goal: I am currently studying for my Series 65 Uniform Investment Adviser Law Exam to better educate myself on the investing world in general. Although not real estate related, this will open the door for me to become an accredited investor as well as build credibility.  Overall, learning investing concepts will strengthen my knowledge base and ensure I am always on the right side of the SEC and ethics in general.

- Partner with an experienced GP or investor who is interested in taking down parking deals for long term holds. I believe that purposely connecting private capital with the parking industry is mutually beneficial. 1. It keeps the industry employed. 2. Provides solid returns for investors in an uncertain and compressed residential real estate market.

- Educate veterans about all the tech and operations jobs the industry has to offer. Hopefully, we can drive a significant amount of veterans to the industry.

- Attend the three major parking industry conventions this year. I am really excited to put names to faces of all the people I have spoken to. I also want to spread the good word about why the industry should hire veterans. And of course, drum up some off-market deals.

**I will continue to post updated versions of this post in order to update and educate everyone on my journey.**

My questions are:  

Which is the right strategy for this niche? JV or partnering with an experienced GP?

Based on my activities below, am I on the right track with building credibility to attract the right partner?

What suggestions do you have based on my particular situation?

Thank you for taking the time read my LONG post; as you can tell I am passionate about parking and veteran employment. I would love to continue the conversation below for anyone interested. Feel free to shoot me a PM as well. Let's talk parking!