Paul Leongas | Why Paul Leongas Checks the Parking Situation Before He Checks the Rent Roll
Paul Leongas
Most commercial real estate due diligence starts with the financials. Paul Leongas starts with parking. Not because the financials do not matter -- they matter enormously -- but because he has watched too many North Shore commercial properties with strong financials become struggling properties the moment a tenancy changed and the new use had different parking needs. Parking is a constraint that cannot be fixed with money, at least not in most suburban commercial corridors where surface lots and street parking are finite resources. Paul Leongas learned this from running restaurants, where parking availability directly correlated with reservation volume on Friday nights.
What He Counts When He Walks a Property
Before Paul Leongas opens a rent roll, he walks the property and the block. He counts parking spaces. He counts them at different times of day -- morning, lunch, early evening. He notes what businesses share the lot, whether there are overflow agreements with adjacent properties, and whether the street parking in front of the building is metered or time-limited.
A commercial building in a North Shore corridor may have strong financials on a Tuesday afternoon and a parking problem on a Friday evening. The financials reflect the current tenants. They do not reflect what happens when the current tenants leave and the next tenant has a different use. A retail clothing store and a restaurant have completely different parking demand profiles. If the building's current rent roll is retail and the area is gradually moving toward food and beverage, the parking math changes.
Why 25 Years in Restaurants Made This a Reflex
Paul Leongas ran restaurants for more than 25 years. During that time, he learned that parking problems killed good restaurants. He watched competitors in strong locations with good concepts struggle and close because the parking situation made a Friday dinner reservation a stressful experience for the customer. He also saw restaurants in less prominent locations outperform expectations because parking was easy.
This is counterintuitive to the real estate investor who has never operated a food-and-beverage business. The response to parking concerns is often "people will figure it out" or "it is a short walk." That response does not hold up against data. Customers who have to circle a block twice on a Friday night do not come back as often. When Paul Leongas evaluates a North Shore property for a tenant who will have evening traffic, parking is the first filter. A well-located space with genuinely difficult parking is a problem he does not want to own.
The Hidden Cost of Parking Deficiencies at Lease Renewal Time
Parking problems show up at lease renewal. Paul Leongas has seen this pattern. A tenant signs a lease and makes the parking work because they are motivated. They adjust their hours, they manage reservations carefully, they communicate with customers. But by year three or year four, the friction accumulates. Staff turnover increases when employees cannot find parking nearby. Customer complaints about the location start to appear in reviews. When renewal time comes, the tenant asks for a rate reduction to compensate for a location constraint that was always there.
Paul Leongas factors parking into lease rates from the beginning. A property with genuinely limited parking is worth less than a comparable property with adequate parking, and the rent roll should reflect that. Ignoring it at acquisition and discovering it at renewal is an expensive lesson. A property with abundant, convenient parking in a North Shore commercial corridor is easier to lease, attracts a wider range of potential tenants, and tends to see lower vacancy rates. He will pay a premium for it. He prices the constraint accordingly or passes on the property.