To be more clear. Depending on the location, those flat parking lots can be pulling in 1+ million per year in profit.
That doesn’t mean building a multi level parking garage in that same space is actually a good investment because demand isn’t unlimited. What you see as wasted space can therefore actually be a highly efficient business.
Put another way if building a 5 story building would be obviously more profitable then they would do that but the opportunity costs is now 1+ million per year you aren’t getting from the parking business.
Not clear. Plenty of people will forgo selling land to a developer who wants to build a five story building in order to wait for the premium that comes from the developer who wants to build a 50 story building.
The business has maybe 30 spaces at $20/day. If we assume some people use hourly rates but most use daily lets say each parking space makes $25/day for $750/day. That works out to $273,750 before expenses. To get $1 million you’d need over 100 spaces which is quite a massive plot of land for the downtown core of a city.
~115 parking spaces can fit on a normal 1-acre paved, marked parking lot. You can double that when cars park in long rows at the cost of having attendants.
You can unquestionably have smaller lots, but it’s hardly a massive plot of land.
1-acre is pretty massive for a plot of land in the downtown core of the city. It can fit an entire apartment complex. The sale value is extremely high so the $1 million in revenue isn’t that attractive given the cost of holding the land.
