Bi Parkway Corp. and Business Intelligence

Case Study: Parkway Corp. and Business Intelligence

On the 10th floor of Parkway Corp.'s Philadelphia headquarters building—nine floors of parking spaces topped by one enclosed floor of nondescript office cubicles—CEO Joseph S. Zuritsky has built an enormous atrium. In the middle of it, he has installed a landscaped series of plaster ponds and waterfalls and stocked them with 20 brightly colored Japanese koi, large gold and orange carp that resemble giant goldfish. Bred by Zuritsky on his fish farm outside the city, the koi, symbols in Japan of wealth and longevity, are known to live for up to 75 years—and in some rare cases, even longer.

The symbolism isn't lost on Parkway executives or its rivals. Founded more than 75 years ago by Zuritsky's father and uncle to demolish old buildings and turn them into parking lots to accommodate America's growing new love affair with the automobile, Parkway, now Philadelphia's largest parking garage operator and third-largest landowner, is today facing one of its toughest business cycles yet.

Traditionally cutthroat, the $29 billion parking industry in recent years has become a story about the survival of the fittest. Heavy consolidation in the industry, driven by Wall Street in the economic boom of the late 1990s, has gobbled up dozens of mid-size firms in recent years, while stiff price wars and soaring liability insurance costs—up 30 percent to 50 percent, on average, during the past year—have forced most companies in the industry to compete more heavily by cutting costs rather than lowering prices, and compelling executives to scramble for ever more elusive efficiencies.

According to Jennifer Childe, a parking industry analyst for Bear, Stearns & Co. Inc., the health of any one parking firm tends to be tied most closely to commercial building occupancy rates, which depend largely on employment rates. When occupancy rates go below 90 percent in major cities, such as during the current economic downturn, parking...