Canada’s parking industry is comprised of myriad contracts and subcontracts, covering office and residential towers, with no accurate centralized data tracking rates or occupancy.

But if you talk to anyone who works in the sector, they will all tell you the same thing: With the pandemic behind us and the

return to office

in full swing, demand is heating up.

“I can tell you that all my sites for September, we are anticipating issues with capacity,” said Ross Frangos, the president and founder of AuditPark and a parking management specialist who oversees four lots, including one in downtown Toronto.

“The issue is that all of a sudden, we have an influx of people who want a parking pass. That’s great, but then we get another request and then another. Where will it end?”

At the very least, Frangos predicts the industry practice of allowing people to rent partial days or get vouchers, based off the cheaper monthly rate, is coming to an end. You may have to pay for a whole month whether you use it or not, creating another financial hit for employees called back to the office.

“Our clients are saying you are either fully in or fully out,” he said, adding that rates haven’t risen, but he won’t rule it out, as operators look to create open spots by raising rates (which forces people into using cheaper public transit). “Summer is usually quiet, so it is not full-on panic. Yet.”

The most recent data, up to Aug. 1, from the Strategic Regional Research Alliance, shows that, on average, occupancy in the Toronto downtown core is 78 per cent of what it was before the pandemic based on five days, indicating many are still not doing a full work week at the office. The low was 52 per cent.

The demand comes as the

Ontario government

and four of the

major banks

are mandating employees back to the office, with some municipalities also falling in line.

Frangos said his suburban lots are also filling up as people return to the office, a far cry from the pandemic’s worst, when lots sat empty and third-party parking managers tried to get out of contracts.

“There are two types of deals in parking. One, they manage the lot for you, and these are the fees. In other deals, you guarantee how much money (the landlord) will make, and the parking manager keeps everything over and above that,” said Frangos. “When the pandemic hit, a lot of operators walked away from their leases. They couldn’t keep paying because the lots were empty.”

As a consumer, your problem is that you cannot lock down your rate today in most lots. Rates can change at any time, and worse, you can be bounced from your reserved spot due to a tenant reclaiming your space.

Jonathan Pearce, senior managing director of leasing with landlord Hines, said there has been a steady uptick in parking demand, and his company may end up walking back “flex spaces” in its buildings.

“A monthly pass in Toronto could easily be $500 per month,” said Pearce. “You could buy 15 in and out (passes), and it was more like $250, and they had a long tail on expiry, so someone coming downtown a couple of days a week could take advantage of that. Landlords have been reluctant to raise rents, but with more consistent demand, (rents will rise).”

He suspects that with more people downtown, some tenants will want their parking spaces back, which they are entitled to with a lease. In many leases, a tenant is entitled to a specific number of spots based on their square footage.

Hines’s new CIBC Square in Toronto has about one parking stall per 5,000 to 7,000 square feet of office space in its two new towers. Older buildings have a lower parking ratio and more spaces.

Pearce said some tenants have given back the right to parking, allowing the landlord to sell it to third parties. But if the tenant wants that space back, it is recallable.

“It is essentially month to month,” said Pearce, adding that it remains to be seen whether the major tenants will want their spaces back. “We could see a bit of a crunch if they start to recall parking.”

Carole Whitehorne, executive director of the Canadian Parking Association, which represents the industry, said during the pandemic, parking got a boost because of the fear of transit due to infection transmission. Still, remote work mitigated any of those financial benefits.

Parking issues are not just in the city core. Usage could also pick up in the periphery around the city and near transit nodes.

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“I think people coming back to the office will be like the first week of school. Bedlam. People will be driving around looking for space, and eventually people settle into a routine, and they will find their routes,” said Whitehorne.

Pricing is hard to track due to its rapid fluctuations across most cities. Additionally, lots are often oversold by up to 30 per cent, as it’s unlikely everyone will park in the same spot on the same day and owners try to maximize use.

Parking lot operators are always searching for equilibrium on prices and vacancy, but the uncertainty of the return-to-office means it will be even more chaotic.

“There is definitely going to be a transition period,” said Whitehorne. “And there is going to be a ranking where the CEOs and presidents get reserved spots and the peons are looking.”

If your plans to go back to the office include driving your car, buckle up. The ride might be rougher than you think.

• Email: gmarr@postmedia.com