Great read on automated parking spaces being a main driver for sales.
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 a private parking owner, this can only make you smile. The city keeps making it harder to park, and our private parking lots will continue to fill to capacity! Great read:
L.A.'s broken-parking-meter scheme may soon expire
July 8, 2013
Remember the scene early on in “Cool Hand Luke” when Paul Newman whacks the heads off those parking meters?
I loved it. You did too -- admit it.
I don’t know whether that’s one of Mike Gatto’s favorite movies, but I hope so. He’s the Los Angeles Democratic assemblyman who wrote the bill that would smack down cities like L.A. that ticket people for parking at meters that turn out to be broken. L.A. sticks Angelenos with a $73 ticket.
It’s one of the city’s more cynical ways of making money, and Gatto wants it to stop. We already pay, as he points out, “for street maintenance, meter installation and meter upkeep.” Cities should spend their time and treasure keeping the meters working, “not squeez[ing] a double penalty out of cash-strapped citizens.”
(The bill has been passed by the Assembly and state Senate and sent to the governor.)
Did Mike Gatto ever get ticketed for parking at a broken meter? Was that the spark to the legislative fuse? I hope that’s true too.
I’ve parked at a meter, put in my money, found it broken and dutifully called the city to report it. What did the dame at the other end of the phone say to my good-deed-doing? “Move your car to another meter.” No refund, no credit, no thanks.
One in 10 L.A. city meters is broken. Many have been vandalized, although less picturesquely than in “Cool Hand Luke.” The city, like the Napoleonic Code, assumes that we are all vandals, jamming the meters to save ourselves six bits. Thus, we cannot benefit from our crime by parking free at a broken meter.
Why did it take an assemblyman to try to fix this? Why didn’t some City Council member introduce a piece of city legislation to do this?
Follow the money; follow the coins. I bet you a roll of quarters that the city does not use that $73 fine to fix the parking meters. I bet you that the city puts that $73 fine into the general fund and goes merrily along, congratulating itself on what a crafty little cash cow it’s milking. Broken meters may very well make more money than working ones; how’s that for a slick deal?
Of course people can cheat the parking rules -- does that give the city permission to out-cheat them? Enforce fair rules fairly and people won’t have grounds to complain when they get dinged for breaking them.
The new meters that accept coins or credit cards are crowding out the coin-only meters. There are nearly 40,000 of them, and fewer than a dozen are broken at any one time. If this is not a problem that will fix itself, then maybe Gatto’s bill will.
The city could do us all a bigger favor by going after the abuse of handicapped parking placards. People use fake ones, or they abuse the ones issued to their disabled relatives. You’ve seen these drivers at the grocery store or the mall. I have. A car wheels into a handicapped spot and two nimble young folk leap out and saunter off.
That’s not how it works. The handicapped person has to be in the car for the placard to apply. The city creates a scofflaw culture when it doesn’t bother to bust these crooks. On some streets in downtown L.A., every single car parked at a meter has a handicapped placard.
Sic the parking enforcement team on a few blocks of the city at a time, catch the creeps in the act and bust them big-time: Take away the placards, tow the car, fine them the same three figures that the able-bodied pay for parking in handicapped spots and note it on the cars’ records. The cheats undermine the entire handicapped parking program.
Enough L.A.-bashing. Let’s switch to Santa Monica, where the city of kumbaya sentiment has re-engineered its parking meters so that if you drive away with any time left on the meter, it’s wiped out.There’s little enough fellow-feeling around here as it is. Finding a few cents’ worth of time left on the parking meter -- or the benevolent sentiment of leaving it for a comrade-in-traffic -- is one of the few civic sharing moments we have.
Los Angeles council member Tom LaBonge has looked warily to the west and says L.A. had better not follow Santa Monica’s suit.
A few free meter moments add "a certain joy in life in the city of Los Angeles," he said. "I know they have it in their playbooks, and I don't want them to call that play."
And don’t even think of committing the random act of kindness of feeding someone’s expired meter. You can get arrested for that. Nice.
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
Someone really likes to call a parking space their own.
Here is an interesting article dealing with parking spaces. In larger cities, smart investors are buying indvidual spaces as investments.
Parking Spaces as Investments
In the game of Monopoly the “Free Parking” space isn’t a property for sale. In the real world, however, investors can take advantage of parking as a form of physical property that can be bought, rented or sold like any other type of real estate. With spaces being sold for as much as $200,000 apiece in densely populated cities such as New York, parking spaces could very well be the new Park Place.
More than 237 million privately and commercially owned vehicles are registered in the U.S., according to the Department of Transportation. This works out to approximately one car for every two people. It may come as no surprise that with the abundance of private transportation, parking is getting harder to find, and as demand increases, so do parking space values. An increasing number of investors are realizing this and beginning to take advantage of a growing market.
Parking spaces can be used as a real estate investment “Parking is a scarce commodity,
Parking Investing Blog
The Expired Meter
International Parking Institute
Donald Shoup on Parking
The Valet Spot
We Wrote the Book on Parking Investing