As cities try to discourage car use, investors see greater redevelopment opportunities for parking lots and garages.

Investors are increasingly targeting parking lots for potential multifamily redevelopment, especially in urban areas, according to industry sources.

“Given the multifamily market has been so strong for the past decade, we’re at a point that really justifies development,” says Rob Goldstein, assistant portfolio manager at CenterSquare Investment Management, a global investment manager focused on actively managed real estate and infrastructure strategies. “We’ve seen debt costs decrease and demand and rental revenue increase. So, those two factors both contribute to the appeal of parking lot conversions to residential.”

Parking lots have been selling quickly recently, especially in cities where they occupy valuable pieces of land. Over the past seven years, the average number of urban parking lot transactions nearly doubled from the average number during the 2006 to 2012 period, according to data from real estate research firm the CoStar Group. Since 2013, the average annual volume of urban parking lot sales totaled $130 million—up from annual volume of under $100 million from 2009 to 2012.