Selling an underground car park: Valuation, process, sale + checklist

Selling underground parking 2023 – valuation, process, sale and broker, what becomes important when selling your underground parking? Who buys an underground car park? For those selling for the first time (example inheritance), however, what often matters most is: How much is an underground car park worth? My small guide for a first insight into the sales process (from 18 steps) and in advance still substantially more roughly: What becomes important with the evaluation. Everything as a first, small insight into the later sale. Tip. You “only” want to sell a single parking space? Then read more here: Selling an underground parking space. For sellers of underground garages, here everything important, from valuation procedures to the topic of taxes.

Selling underground parking 2023: value, broker and procedure

Let’s start with one of the most important questions for first-time sellers: What is my underground garage worth? After the 3 central factors, you will find all the steps of the real estate sale, which are also relevant for you and the sale of your underground car park, from documents, to the broker question, to the purchase contract and handover.

Let’s start with the 3 most important value factors:

  1. Location (city, district and street)
  2. Condition of the underground parking
  3. Short-term, long-term tenants / vacancies

Location: city, street and fluctuation

The better the location of your underground parking garage, the easier it will be to rent out the parking spaces to long-term and / or short-term parkers at a later date. In order to keep the vacancy rate as low as possible, the first step in the valuation is to take a look at the location.

Situation in the valuation (current and perspective):

  • Macro perspective – In which city do you sell?
  • Mesoperspective – Which district?
  • Micro perspective – Which street and house number?

Regardless of whether it’s a small town, medium-sized city or metropolitan area, there are more and more cars in city centers every year. The higher the fluctuation and the fewer the competing offers at the location, the better – also for the investors’ return.

The next step is for buyers (important to know their perspective) to evaluate the condition of your underground parking garage.

Condition of your underground parking

Very few investors want to undertake an extensive underground garage renovation. Of course, there is a certain percentage who want to buy very, very cheaply and are therefore looking for old or poorly maintained properties. The condition plays the central role in the evaluation of your underground car park, in addition to the location.

For a concrete evaluation, it is necessary to determine the actual state and the target state.

Typical shortcomings of the first decades are:

  • Underground garage floor
  • Floor coatings
  • Concrete repair
  • Crack sealing
  • Waterproofing the ceilings

Sometimes it is also redevelopment backlog, for example, due to disputes about redevelopment of the owners’ association.

Important in advance, it is only an example:

The maintenance costs for parking garages fluctuate massively depending on the condition

Very old underground parking: 40+ years old

Here’s an example, a really old underground garage, with about 100 parking spaces:

Let’s say the underground parking garage is now 40, 50 years old and really at the end of its rope and getting on in years. Conversion and renovation costs are therefore unavoidable for the new underground garage owner.

Per parking space of the underground garage you can count in something with ~ 6,000 euros (as a total project), with 100 parking spaces size.

The retrofitting of an underground parking garage floor alone would cost about 1.4 million euros. To this must be added the renovation of the concrete, round about 1.1 million euros.

Next, we take a look at the waterproofing of the underground parking garage ceiling. For the new insulation against dripping water, you can expect another 0.5 million euros (source: DZ Online). The items will be smaller, but in total not insignificant. In addition, smoke extraction, ventilation or even the renewal of the electrical installation, also to be able to take increasing markets, such as the increasing electric cars in the inner cities and residential areas.

Short-term, long-term tenants / vacancies

In addition to short-term tenants on site, the assessment also looks at long-term tenants and vacancies. In the end, the evaluation is therefore based on short-term/long-term tenants and the possible future potential (refurbishment, development, marketing) of the parking garage.

Long-term leases are of course the ideal case and vacancies the opposite. So that the valuation is realistic and so that later interested parties have an overview, information from your tenants is collected. In addition, there are many smaller parameters, in good A-locations, for example, also the commercial space rental for advertising (driveway, parking areas and facades).

Thus you have 3 central factors of the value determination:

  1. Location (city, district and street)
  2. Condition of the underground parking
  3. Short-term, long-term tenants / vacancies

Step by step: checklist sale

Sales of underground garages are much more specialized than the simple sale of a parking space, parking lot or a single garage. Many underground garages are also not sold through real estate portals, but through personal networks, often by good and experienced real estate agents.

Nevertheless, it is important to know for the sale so that you can prepare well and also find an experienced real estate agent.

Preparation: broker, documents and valuation

The most important things about preparing real estate and sale.

Sales phase: networking and negotiation

The second phase is about marketing your property to find buyers and investors with sufficient creditworthiness.

Sales processing: complete transfer

From the purchase contract to the handover.

Partial ownership underground parking: Single parking space?

Lastly, on the smallest unit: Can you sell an underground parking space individually? The individual sale of underground parking spaces is possible. However, it depends on whether it is subject to special ownership or a special right of use. The difference is, if you have a parking space with its own land register sheet (special property), the sale is simple. In the case of a special right of use that belongs to a condominium, the special right of use can only be sold to another co-owner.

Here you can find more about the individual sale of parking spaces in an underground garage:

Location, location, location! Real estate market

Parking spaces are scarce in many hotspots in Germany. That’s why the first piece of good news is that you can sell your parking garage at a realistic price. Because last year alone, there were 2.92 million new passenger car registrations. According to the Federal Motor Transport Authority ( KBA ), the vehicle population in Germany increased by a full 1.1 million vehicles compared to the previous year’s reporting date to approximately 66.9 million vehicles registered in Germany, a full +1.6%.

66.9 million registered vehicles in Germany

With the right buyer and investor network, typically through experienced brokers with successful deals, you will have your underground parking garage sold relatively quickly.

Here’s another special look at general real estate sales in the larger cities: