Except in the densest cities, parking is a key amenity for most retailers and renters. Combine the two—as mixed-use communities do—and parking can become a challenge. Gary Glick, a partner with Cox, Castle & Nicholson, has a handful of tips for apartment owners to tackle parking provisions in retail leases.
First, it is important to note that apartment parking structures look much different than those attached to shopping centers. "As opposed to most shopping centers, the parking in a multi-family project is usually within a structure and gated," Glick tells GlobeSt.com. "In most cases it is subterranean. The residential parking spaces are typically segregated from the retail parking spaces."
As such, apartment owners and developers should organize spaces accordingly within the parking structure. "Multifamily developers should segregate employee parking spaces for retail tenants from the spaces that are set aside as non-exclusive parking spaces for retail customers," says Glick. "In some cases, certain designated parking spaces in the retail parking areas may be expressly designated for the benefit of a particular retail tenant. When such designated spaces are provided, a multi-family developer should make sure to include in any retail lease that it will not be responsible for policing these exclusive parking spaces."
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Glick also recommends that owners avoid allowing retailers to use renter-designated spaces. "In some cases, multi-family developers permit the employees of retail tenants to park in designated spaces in the residential parking areas, but this is not preferable because oversight can prove difficult," he says.
Lease deals should also address payment for retail parking, since users will likely not live in the building. "In most multifamily projects, the parking area set aside for the retail tenants will be gated and require the retail customers to obtain a ticket upon entrance," says Glick.
There are a few ways to handle payment. Retailer's customers could be charged based on an amount of time; a flat rate; or for free with a validated ticket. "It is common in supermarket leases in a multi-family project for the developer to pay for the parking validation equipment to be located in the tenant's premises," adds Glick. Whichever structure is chosen, the payment method should be outlined in the lease transaction.
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Kelsi Maree Borland
