Operating expenses are the ongoing costs of running a parking facility, from staff and utilities to insurance, maintenance and technology, as distinct from capital costs to build or replace it.
Revenue minus operating expenses is net operating income (NOI), the figure that drives a facility’s value and its ability to support debt. See capitalization rate and pro forma. Whether an expense falls to the owner or the operator depends on the management or lease agreement. See owner-operator agreement.
Typical categories
- Labor: attendants, cashiers, supervisors, maintenance and security staff.
- Utilities: lighting, ventilation, elevators and EV charging energy.
- Repairs and maintenance: cleaning, sweeping, striping, sealing and elevator service.
- Technology: PARCS service and software fees, payment processing and card fees.
- Insurance, including garagekeepers liability, and property taxes.
- Management fees and administrative costs.
What to watch
- Software subscriptions and transaction fees, which have grown as facilities move to cashless and app-based payment.
- Deferred maintenance, which lowers expenses this year and raises capital costs later.
The Parkonomics view
Operating expenses are where good operators earn their fee. Read the line items, not just the total, and ask which costs went up because of choices, such as technology and staffing, rather than inflation.
Related terms: Pro Forma, Cap Rate, Owner-Operator Agreement, Life Cycle Cost, Hard Construction Costs, Net Operating Income