A parking financial feasibility study tests whether a proposed parking facility, or a whole parking system, can pay for itself by comparing projected demand and revenue with the cost to build, finance and operate it.
It is usually commissioned before a city, institution or developer commits to a project, and lenders and bond investors rely on it. A good study does not just produce a yes or no; it shows which assumptions the answer depends on. See pro forma.
What it covers
- Demand: who will park, when and for how long, now and in the future. See parking demand analysis.
- Revenue: rates, occupancy, monthly and transient mix, validations and ancillary income such as EV charging.
- Costs: construction, soft costs, land, equipment and operating expenses. See hard construction costs and operating expenses.
- Financing: debt capacity, coverage and the funding gap if any. See debt service coverage ratio.
- Sensitivity: how results change if demand, rates or costs move.
What lenders and boards look for
- Conservative, documented demand assumptions.
- A clear net operating income and coverage under downside cases.
- Recognition of long-term risks such as remote work, ride-hail and autonomous vehicles.
The Parkonomics view
A feasibility study is only as honest as its demand forecast. The most useful ones show the downside case as clearly as the base case, and size the project to survive it.
Related terms: Pro Forma, Parking Demand Analysis, Net Operating Income, Debt Service Coverage Ratio, Municipal Bonds, Rough Order of Magnitude