These days, your commercial clients could use additional revenue streams. Some are turning to unconventional tenants or new uses for their facilities. Others are looking right outside their door. Your client’s parking lot—or a portion of it—could be rented out to other businesses, seasonal vendors, overflow parking, or special events. Quenton Rockwell, sales associate with Coldwell Banker Commercial in Cypress, has seen commercial properties bring in extra cash this way. Rockwell serves on the board of directors of CommGate, the Houston Association of REALTORS®, and Texas REALTORS®. Before your clients make room in their lots, discuss the following topics with them.

What space is available?

Not every parking lot is suitable for rent. “Is it flat and stable?” Rockwell asks. “Is it large enough to accommodate another use? If needed, could a tenant connect to electricity for resources such as lighting, electronic security, or pay stations?”

Obviously, location matters. Is the lot near another business or organization that needs overflow parking? Could it attract foot traffic if need be?

Is the property zoned for this?

Your clients should investigate if the property’s zoning would support another use and if so, what type.

Can the site accommodate both needs?

Rockwell gives the example of a church and a nearby business. The church parking lot is empty except for Sunday and one weeknight. A nearby business’s peak hours are not during those times. The two organizations could easily share the parking lot.

Would a future tenant complement—or at least not detract from—your client’s business? A restaurant may not want a food truck outside, but a nightclub or an office full of hungry employees may welcome it.

What’s your clients’ exposure?

Rockwell says your clients’ first call should be to their insurance provider. Would their insurance cover guests visiting the property for another purpose? If someone slips and falls, who is liable? Are your clients covered in the event of theft or vandalism?

How would the deal be arranged?

The safest course of action for you and your clients is to advise your clients to contact an attorney to draw up a formal lease agreement. That way, all details and contingencies are spelled out, just with like any other tenant.

How do your clients attract tenants?

Rockwell says that often prospective tenants interested in parking lot space will just walk in or call the building’s management. “It’s very casual,” he says. The prospective tenant may think your client’s location would be perfect for their business. If your clients think a particular type of tenant would be well suited to their site, they can start having conversations.

Even if renting lot space has never occurred to your clients, it could be worth discussing. “Interest rates are cooling slightly, but people have to maximize their income by whatever means necessary,” Rockwell says. “The land could be profitable if it’s just sitting there.”

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