Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
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41 May | June | 2014 CCIM.com years af er purchasing the property, the new owner issued an RFP to assess operating costs as well as the fees charged to manage the asset. In the proposal review process, several bidders of ered new mar- keting initiatives and technological enhancement opportunities. T e incumbent operator promised business as usual. A comparison matrix of proposed operating expenses also revealed that the incum- bent proposed annual operating costs were 11.5 percent higher than the nearest bidder and 47 percent higher than the least expensive, using a base staf ng schedule included with the RFP. T e owner subsequently requested that the operator submit a best and f nal budget proposal and revised marketing plan. Much to the owner's dismay, the best and f nal budget was still 5.5 percent greater than the nearest bidder and 26 percent higher than the least expensive. Additionally, the revised marketing plan clearly lacked the creativity shown by other respondents. Eventually, the operator's unwillingness to reduce expenses, explaining that "some operators are just better and in fact command greater fees," resulted in the owner awarding the asset to another f rm. RFP Process To begin the RFP process, the property owner or manager, with assistance from a parking consultant, prepares a list of qualif ed operators from whom they would like to request proposals. Along with the RFP documents, a sample management agreement is included to ensure an unbiased comparison among providers. A pre-proposal meeting and walk-through is held af er interested operators have had a chance to review the RFP document thoroughly. Questions are not typically allowed during the pre-proposal meet- ing and walk-through to ensure that no operator will have an unfair advantage by reason of unilateral conversations with the owner or the owner's consultant. Any questions resulting from reviewing the RFP or from the walk-through are solicited from the operators and answered through a written addendum. Most owners and man- agement companies select a committee to evaluate the proposals, attend f nalist interviews, and select the best operator. T e selection committee is usually comprised of people involved in overseeing the facility, but sometimes may include people engaged in the parking business that are employed elsewhere. T e owner's parking consultant assists the selection committee with the evaluation process by preparing an objective analysis of the proposals and answering questions the selection committee may PARKING STATS • Monthly unreserved U.S. parking rates increased YOY by $5.47 or 3.4 percent; in Canada, by $6.39 CAD or 2.7 percent • The average monthly U.S. median unreserved parking rate is $166.26 USD; $241.72 CAD • Daily rates increased by 2.9 percent to an average of $17.19; Canadian daily rates increased by 3.4 percent to an average of $16.04 CAD • One-third of all U.S. markets have garage waiting lists with the average time 9.3 months; All Canadian markets have garages with wait lists with average time 7.8 months Source: Colliers International 2012 Parking Rate Survey have when it performs its own analysis. T ough usually attending the interviews, most consultants prefer, or even demand, to be a nonvot- ing committee member. In the public process, the consultant gener- ally participates in the presentation to the f nal decision-making body such as a city council or airport commission. For owners or property managers, the RFP can be an important tool. Whether the owner or manager feels the operator provides great service or whether there's speculation that a replacement can provide similar service for less cost, issuing an RFP can be an eye-opening experience. It can of en get the owner and property manager back on track when it comes to managing their parking asset to its fullest potential and also help to achieve the maximum bottom-line prof t- ability for the owner. Phill Schragal is director of the Parking Operations Consultant Group at Walker Parking Consultants. Contact him at phill.schragal@ walkerparking.com. EVALUATION SCORECARD Initial Rating Criteria Max Points General manager résumé 5 Related operating experience 20 Proposed operating plan 20 Proposed operating expense budget 30 Proposed management fee 25 Maximum score 100 Final Evaluation Criteria – Short-Listed Operators Max Points General manager interview 10 Operator's presentation 10 Operator's experience (similar venues) 1 Reference checks 5 Operations plan and cost proposal 25 Operator's customer service training plan 20 Management fee 20 Maximum score 100 Source: Walker Parking Consultants Creative_Outlet/Thinkstock 3 9 - 4 1 F - R o o m I m p r o v e m e n t - S c h r a g a l . i n d d 4 1 39-41 F-Room Improvement-Schragal.indd 41 4 / 2 9 / 1 4 3 : 0 9 P M 4/29/14 3:09 PM