JNL's own John Roy was interviewed by the Valet Spot about parking investing (of course). It's a candid interview that any new or experienced parking lot investor will benefit from hearing.
Today, we are excited to have on the show, John Roy of JNL Parking, a company that provides parking lot broker services. He’s also an investor, a certified parking professional, and an operator in the parking industry.
On this episode of The Valet Spot, John shares his expertise in the field of investing and increasing the value of parking lots.
Tune into to find out detailed information about which parking lot features and services have the best return on investment. You’ll also find out how to communicate effectively with a parking lot owner so that the doors of opportunity may open and start you on your parking lot investment journey.
Listen to This Interview to Learn:
This is the kind of news you want to read if you are a parking investor. It confirms once again that parking is a scarce resource and when developers are hungry for land it's the first place they turn to fill the need. Here are two recent articles that highlight that this trend is not going anywhere in the near future:
Sayonara Parking Garage, Hello Ubiquitous Luxury Housing
April 9, 2014, by Zoe Rosenberg
It seems the Post has also caught onto the trend that parking lot parcels are being snatched up and converted to luxury condos. This time, talk centers around an Upper West Side garage on West 77th Street between Broadway and Amsterdam Avenue. The for-sale lot is being marketed as a residential teardown that can be expanded from its current 7,700-square-feet to 77,000-square-feet. The Post expects the lot will fetch in the ballpark of $61 million, or $800 per square-foot, thanks to its neighbor, the luxury rental development The Larstrand.
The garage at 219-233 West 77th Street is not the only lot to grace the market with development aspirations. There have been quite a few before it; a few of which we mapped. The Post notes that Finance Department statistics declare a loss of five parking garages in Manhattan in the last two tax years. In the past, Brooklyn has seen a loss of 40 garages, the Bronx has given up 30 garages, and Staten Island has lost three garages. The trend extends most heavily in Queens, where 44 garages have been snatched up for development in years past. The trend accompanies a privatization of parking spaces—found increasingly under new luxury rental and condo buildings—making it even more of a challenge and a privilege to have and park a car in the city.
Upper West Side Garage to Turn into Cushy Condos
April 8, 2014, By Lois Weiss
Another Manhattan garage building will bite the dust to be reincarnated as a place to park people.
The Upper West Side garage at 219-223 W. 77th St. is on a plot of 7,700 square feet. Sources said it is being marketed as a residential tear-down that can be redeveloped to 77,000 square feet.
Located on the north side of the street between Broadway and Amsterdam Avenue, and next to the new 20-story Larstrand rental, it would not surprise us to see bids rising to or above $800 per square foot — more than $61 million.
Calls to the Avison Young marketing team of Vincent Carrega, Neil Helman, Jon Epstein and Charles Kingsley were not returned.
Like other brokerages, this group has been active in the garage-sale market. Finance Department statistics show Manhattan had 865 garages in the tax year 2012-2013, but 860 in 2013-2014 — a loss of five garages and an untold number of spaces.
It also seems more are being marketed every day.
Brooklyn, the land of the hipster bikester, is losing even more — so far, 40 have bitten the dust.
Thirty are gone in the Bronx and three in Staten Island.
Queens is the biggest auto-space loser, however, as 44 went down for the count.
The good news is that the city’s tax rolls will increase as expensive luxury apartments take the place of these lower-valued garages. The bad news is that finding a place to park a car is getting a lot harder.
While a few parking spots have already been sold as a condo development perk, we predict that some entrepreneur will buy or take their current garage building, split it up, and sell all the spaces as car condos.
As the New Year is upon us, we like to reflect upon the deals from year past that were made, lost, and the great opportunities in parking investing for 2014.
No other story reflects the optimism, spirit, and entrepreneurship of the parking industry more than the story of “Nick Antonelli”.
Nick was the son of Italian immigrants that settled in Washington DC. His father sold Olive oil on the streets and his mother died at a very young age. After returning from WWII, Mr. Antonelli got a job as a valet attendant and was so poor that he survived on nothing more than cornflakes and water. The boarding house where he lived was so bad, that he spent week-ends killing rats and bugs with Kerosene. This however, did not deter Mr. Antonelli from his ultimate dream of one day buying a parking lot.
Read his full story as written by Emma Brown from the Washington Post:
D.C. real estate, parking-lot magnate Dominic F. 'Nick' Antonelli Jr. dies at 88
By Emma Brown
Washington Post Staff Writer
Dominic F. "Nick" Antonelli Jr. grew up so poor that he survived at times on nothing but cornflakes and water. After dropping out of high school, he made a living as a carhop in a parking lot across from the plush Mayflower hotel in downtown Washington. He lived in a boarding house nearby, where he spent Saturdays ridding his room of bugs and rats with the careful use of kerosene.
From those beginnings, Mr. Antonelli used determination, shrewdness and connections with the District's elite to build one of the city's largest and most powerful business empires, a conglomerate of parking lots and sprawling real estate investments that gave him a key role in shaping the development of the city and its suburbs.
Mr. Antonelli, 88, who became part-owner of the Mayflower before the collapse of his businesses forced him to declare bankruptcy in 1991, died July 19 at his home in Potomac. He had cancer.
Mr. Antonelli went into the parking-lot business in 1946 when, using carefully scrounged savings, he leased and then bought the lot where he had worked as an attendant. He eventually built a nine-floor corporate headquarters there for Parking Management Inc., the firm he founded with railroad heir Kingdon Gould Jr. By the mid-1960s, PMI operated 90 lots in the city, and the company's logo is still ubiquitous on garages in the District.
He gave generously to politicians, including Rep. John L. McMillan (D-S.C.), the longtime chairman of the House District Committee, to prevent the creation of a municipal parking authority. But he realized early on that land, rather than parking, was the key to wealth.
Working 18-hour days, the entrepreneur made millions of dollars in the post-World War II real estate boom of the 1950s and '60s. He bought and demolished hundreds of old buildings, turning the sites into parking lots until he was ready to build office buildings, apartments other profitable developments -- many of which included PMI garages.
Mr. Antonelli's real estate holdings extended into Washington's suburbs and as far afield as Panama, where he owned more than half a million acres of land, a coconut-oil refining business and a Coca-Cola bottling company. He also owned interests in a range of businesses, including tomato and cucumber farms in the Bahamas, an auto-parts manufacturer in Maine and a ship-salvaging outfit in Texas. He lived on a 22-acre estate in Potomac and occasionally spent time on his 103-foot yacht.
The key to his success, he said, was his willingness to work harder than anyone else. His first big business deal came in 1947, when he bought a pair of binoculars and rented a room on the top floor of the Willard Hotel. Camped there for several days, he counted the cars going in and out of the Great Plaza, a giant government-owned parking lot at 14th Street and Pennsylvania Avenue NW.
When the Great Plaza came up for lease, the information Mr. Antonelli had collected gave him an edge. He submitted the winning bid and went on to operate the lucrative lot for more than 30 years.
After a rise, a fall
Decades after Mr. Antonelli's rise, however, his business empire began to falter. By the early 1960s, he had co-founded Madison National Bank and Mortgage Investors of Washington. The bank financed real estate ventures in the region and came under scrutiny for lending heavily to Mr. Antonelli and other insiders.
In 1978, Mr. Antonelli was indicted on charges of bribery. Prosecutors said that he had landed a $20 million contract to lease office space to the D.C. government in return for providing financial help to mayoral aide Joseph Yeldell, who owned a struggling travel business and was unable to repay his loans from Madison National Bank on time.
Mr. Antonelli and Yeldell were convicted by a Washington jury, but the case was retried in Philadelphia after it came to light that the father of one of the jurors had worked for -- and been fired by -- Mr. Antonelli. The second time around, the two men were acquitted.
Mr. Antonelli, an intensely private man who rarely spoke to the media, stayed largely out of the news until the early 1990s. He was forced to seek Chapter 11 protection in 1991 when Madison National Bank failed, a recession slowed the real estate market and several loans that he had guaranteed for other developers went bad, leaving him with more than $250 million in debt that he couldn't repay.
In one of Washington's largest and most complicated personal bankruptcy cases, the same financiers who had courted Mr. Antonelli's business for decades were now creditors who examined his business records and convoluted partnerships in a years-long search for assets.
In 1993, Antonelli reached a settlement that required him to turn over his considerable business and interests and sell his estate. He repaid creditors about 35 cents on the dollar; in return, he was allowed to keep $4 million, which he used to live on after buying a modest home in Potomac.
Children of immigrants
Dominic Frank Antonelli Jr. was born April 8, 1922, to Italian immigrant parents in McAlester, Okla. His mother died when he was young, and the family moved to Washington, where his father sold olive oil and his grandfather worked as a marble carver -- six of his statues adorn the Union Station entrance downtown.
Mr. Antonelli was an Army veteran of World War II. At one time, he worked in the circulation department of The Washington Post, whose former offices on E Street NW he eventually bought and leveled to create a parking lot.
His marriage to Dorothy Lee Jones ended in divorce. Survivors include his wife of 42 years, Judith Gwenn Dolan Antonelli of Potomac; two children from his first marriage, Lee Antonelli of Jupiter, Fla., and John Antonelli of Deerfield Beach, Fla.; and three grandchildren.
Mr. Antonelli was friends and investment partners with big names in Washington real estate, such as steakhouse entrepreneur Ulysses G. "Blackie" Augur. But even with his allies, he could be less than forthcoming during business negotiations. He once asked 10 businessmen to join a venture that required each participant to pitch in $100,000. According to the Washingtonian magazine, one of the men asked Mr. Antonelli what he planned to use the money for.
"If I have to answer all those questions, I don't want you in the deal," Mr. Antonelli reportedly said.
He was a founding member of the National Italian American Foundation and helped establish the Casa Italiana Language School adjoining Holy Rosary Church in Washington. He played at least two games of gin rummy each week: one at the University Club, where he was a member, and another at the Touchdown Club, once housed downtown in a building he owned.
2014 promises to be another great year in the parking industry. Don’t get left without a spot.
John and Lance
This would be a deal in any of our major markets. But once again, parking is limited no matter where you live.
Hong Kong Parking Costs $HK387,000 as Cash Moves From Homes
Investors reacting to the Hong Kong government’s campaign to curb home buying in the world’s most expensive market are shifting money into parking spaces, pushing up prices that in high-end neighborhoods can match the cost of two U.S. homes.
The average price of a previously owned parking spot in residential complexes rose 6.7 percent to HK$640,000 ($82,600) in the third quarter, the second highest on record, from the prior three months, according to Centaline Property Agency Ltd. A space in the exclusive Repulse Bay area sold in May for HK$3 million ($387,000), the most for a single transaction and more than double the median U.S. home price, according to CarparkHK.com, a website that tallies parking-spot information.
Hong Kong Chief Executive Leung Chun-ying has unveiled three major sets of curbs on home buying since taking over in July, amid concerns that continued U.S. stimulus would attract more funds into the city and fuel an asset bubble. Apartment prices in the city doubled in almost four years, driven by near record-low interest rates and an influx of money from China.
“There’s just too much liquidity in the market,” said Simon Lo, Hong Kong-based executive director of research and advisory at property broker Colliers International. “The government has set up a firewall for residential properties, but all this money still needs to find a place.”
Spaces TransferableHome prices gained 4.4 percent in the third quarter, according to Centaline, the city’s biggest closely held realtor by market share. Hong Kong is the priciest place to buy a home, according to broker Savills Plc (SVS), which compared prices in 10 cities, including New York and London.
Most parking spaces in Hong Kong, including those inside residential complexes, are freely transferable with separate ownership titles from the apartments, according to Hong Kong City Parking, which operates 10 parking garages in the city. Even so, some garages have rules prohibiting nonresidents from entering and parking on the premises, which lowers the leasing options available to the owners, said City Parking Chief Executive Officer Josh Wong.
Spaces in industrial and commercial buildings also are transferable, though landlords at most prime-office and shopping locations normally hold on to parking spaces to benefit from the stable rental returns they provide, said Wong.
“The circumstances are providing a perfect combination for a bubble in parking spaces,” he said. “There are demand-supply imbalances in some districts and the banks are pushing for the mortgage business.”
‘Less Resilient’Hong Kong banks normally lend a maximum 50 percent of a parking space’s value, compared with 70 percent for residential properties, according to Kenneth Tsin, head of property loans at Bank of East Asia Ltd. (23) Parking-space mortgages are riskier for banks compared with residential- and commercial-property mortgages, Tsin said.
“They are relatively less marketable than flats and shops, while their values are also less resilient than those of housing prices,” he said.
Developers often sell the spaces independently from the residential units. Cheung Kong (Holdings) Ltd. sold 514 parking spaces at its Festival City project in the city’s north on Nov. 24 for HK$980,000 to HK$1.3 million, said Roy Choi, a regional sales director at Centaline.
While realtors post listings of parking spaces for sale and charge fees on deals, few brokers specialize in them because the margin is too small, said City Parking’s Wong. Most buyers go to websites such as CarparkHK.com or ParkingHK.com, which partners with Hong Kong City Parking, for information.
Jerry Yeung, a 28-year-old stock broker, bought a parking space in a residential complex near the Olympic subway station, about a 10-minute train ride north of the Central business district, for HK$1.02 million earlier this month, just a week after the government announced its latest home-buying curbs.
Easier Investment“All these measures make buying apartments so much riskier,” said Yeung, who plans to lease the space for HK$3,000 a month. “Parking spaces are a much easier and simpler investment, plus you don’t need too much capital. If things in the apartment market don’t change, I’ll probably stick with this for a while.”
A parking space at Lohas Park, a middle- to low-end residential project in the city’s northeast, sold for HK$910,000, Centaline said Nov. 4. The space is being leased for HK$3,300 a month, equating to a yield of about 4.4 percent.
By contrast, a 900-square-foot apartment in the same project is being sold for HK$5.18 million, according to Centaline. With a monthly rental of HK$15,000, the yield is around 3.5 percent.
Falling YieldThe record for average parking-spot prices is HK$660,000, set in the fourth quarter of 1997, just before the city’s last major real estate crash.
The HK$3 million paid for the parking space in Repulse Bay, a residential district that’s home to some of the city’s richest people, including billionaire Cheng Yu-tung, is the highest on record, according to data compiled by CarparkHK.com, which also sells advertisement space for auto-related products.
Average yield for a parking space has fallen to as low as 4 percent in some districts from more than 5 percent two years ago and may decline to around 3 percent next year “if the frenzy persists,” said City Parking’s Wong.
Hong Kong, with 7.1 million people and a vast public- transport network, including subways, buses, ferries and trains, has one of the lowest car ownership rates among developed countries, with 56 cars per 1,000 people, according to World Bank statistics in 2011. That compares to 439 in the U.S. and 101 in Singapore.
Luxury CarsThose that do drive tend to do so in luxury: high-end cars such as Rolls-Royces, Bentleys and Mercedes-Benz accounted for 47 percent of total private-car sales in Hong Kong during the first 10 months of this year, according to figures compiled by industry analyst IHS Automotive.
In space-starved Hong Kong, the government charges a minimum first-time purchase registration tax of 40 percent of the value of a private car, and a minimum HK$3,929 annual license fee.
After Leung, a former property surveyor, imposed a 15 percent tax on non-local and corporate homebuyers and raised a resale tax on Oct. 26, 68 parking spaces changed hands in the next seven days, rising to 207 spaces in the week ending Nov. 16, compared with 33 recorded in the week before the announcement, according to figures compiled by CarparkHK.com. That’s the most transactions in a week since the website began collecting such data in February 2011.
‘Another Push’“We have already seen investment going from properties to parking ever since” the government first imposed an extra tax on property transactions in 2010, said City Parking’s Wong. “The latest set of measures just gave it another push.”
The government won’t rule out introducing measures to prevent a bubble from forming in the nonresidential market, Financial Secretary John Tsang wrote on his blog on Nov. 4.
There were more than 8,300 parking space transactions in Hong Kong in the first 10 months of this year, accounting for 8.9 percent of all property deals, real estate broker Midland Holdings Ltd. (1200) said. That percentage is the highest since records were first kept in 1997.
‘Negative Correlation’“The numbers suggest there’s a negative correlation between parking spaces and homes,” said Buggle Lau, chief analyst at Midland. “The taxes have driven investors away from buying apartments.”
Borrowing costs in Hong Kong are almost at record lows because the Hong Kong dollar’s peg to the U.S. currency ties monetary policy to the Federal Reserve’s even as the economy is driven by China’s growth. The city’s biggest lenders such as HSBC Holdings Plc and Standard Chartered Plc charge an average 2.15 percent on home loans, below the city’s inflation rate of 3.8 percent.
“At this interest rate nobody wants to leave their money in the bank,” said Wong Leung-sing, an associate director of research at Centaline. “When you try and stop people from investing in homes they have to find something else. Shops and offices are probably too expensive for most retail investors. Car spaces are the best alternative for them.”
By Kelvin Wong and Stephanie Tong
In our business, a parking shortage is good thing - a very good thing. That dirt lot that you thought was worthless 10 years ago suddenly is the talk of the block. This recent article reiterates that finding a place to park is not only going to get harder, but when the city is adding incentives NOT to include parking for a new development, you can bet parking rates are going up too.
Can’t Park? Blame a Condo
By MARC SANTORA NY TIMES
Ever since the car muscled out the horse and garages supplanted stables, New York City has had a conflicted relationship with the automobile. In recent years, the car has been on the losing side. Whether it is the addition of bike lines or pedestrian plazas, a push for congestion pricing or rising tolls, the once-exalted automobile is under siege.
In Manhattan the car faces yet another threat, as parking lots and garages are being snapped up to make way for all sorts of development, especially luxury condominiums. In most cases, the lost public spaces are not replaced, because zoning rules discourage developers from adding parking to new residential buildings.
The spaces that do get built are likely to be in luxury condominiums — and to go to the highest bidder.
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