Downtown Mixed-Use Garage
Property Overview
The property is a 2,651-space, two-deck, 15-level garage in downtown San Diego. It is the planned parking supply for the redevelopment of a former shopping center into retail and office space. Demand comes from downtown restaurant, retail and office parkers, plus ballpark and convention events, and the garage is open 24/7 with no anchor tenants yet. The engagement had several moving parts. The lender had recently taken direct control of the property, redevelopment was expected to resume in 2026, and the garage was run under a lease that ownership wanted to convert to a management agreement through an operator RFP. The garage earned about $6.7M in gross revenue and $5.5M in operating income a year, but both had fallen about 6% over the trailing 12 months.
Positioning the Garage for Redevelopment
Ownership needed a clear view of the garage’s income and how it was controlled before choosing an operator and committing capital. We tested revenue controls against system data, surveyed eight competing garages, reviewed online sales and staffing, assessed garage conditions, and reconciled the monthly statements against billing and system reports. We identified $256K in added annual net income and $3.7M of value creation at a 7.0% cap rate. That is $2.7M after an estimated $1.0M in required capital improvements.
- Short-stay rates: rate bands for stays of under four hours were fragmented and priced below the two nearest competitors. Matching those bands and raising early bird and lost ticket rates adds $220K a year.
- Monthly parking: the $190 restricted-access monthly rate was below the next lowest rate in the area of $200, and monthly parking was not listed online. Fixing both adds $17K.
- Online sales: aggregators kept 24% of online sales. Moving those parkers to the operator’s lower-fee reservation platform saves $19K after probability weighting.
- Revenue controls: we found 54 active monthly parkers who were not being billed, monthly revenue 4% below billings, and online sales grouped with other income.
- Agreements and capital: we recommended converting the lease to a management agreement, buying out the $604K equipment contract balance on better terms, and opening 30 unbilled reserved stalls to the public.
- Customer experience: we prioritized lighting, paint, wayfinding and camera upgrades to address dated conditions behind negative online reviews.
The result gave ownership a well-controlled operation to carry into the operator RFP and the redevelopment.