Nobody can ruin your parking business like the government can. We hope these Tampa airport parking lot owners fight these fees until the end. No one should have to compete with Uncle Sam. What do you think?
TAMPA -- The price of parking at privately operated, off-site lots serving Tampa International Airport passengers could increase if a new 8.5 percent Hillsborough County Aviation Authority "privilege fee" on gross parking sales is imposed, the president of A-1 Express said Monday.
Del Smith said he will meet airport Chief Executive Officer Joe Lopano Wednesday in hopes of revising the rate of the fee, which he said eventually could be passed on to customers in the form of a tax if the airport's current plan moves forward.
Smith said his lot and two others -- another three have gone out of business in the past year or so -- save consumers $2 or more a day over the airport's $9 daily fee at its economy lot and provide valet service at the same base cost to the elderly and others who cannot easily navigate airport parking where valet service costs $25 a day.
"We understand the airport needs to recoup revenue," said Smith, who also is contacting the aviation authority board members who approved the policy earlier this month and are scheduled to vote on the final agreement Nov. 7.
"We have had a free ride from a privilege fee for the 19 years we have been in business, but I just want to determine if there is any way else we can look at this," Smith said.
Case law indicates that businesses using airport facilities to make a profit from airline customers can be charged for their use of airport property, Tampa International spokeswoman Janet Zink said.
"What we are doing is not unprecedented," Zink said. " Revenue generated from the privilege fee will help maintain the airport facilities, including the roads and curbsides the off-airport parking companies use.
"If the off-airport companies choose to pass the privilege fee increase on to their customers, they still will maintain their niche as a lower-cost alternative to the convenience of on-airport parking."
The airport increased its parking rates effective Oct. 1. But those rate changes at the short-term and long-term garages affect only about 10 percent of the travelers using them, because most people either park for less than one hour, which is free, or for at least a day, which has a price cap.
The maximum daily rate for the economy garage remained unchanged at $9 a day, along with the daily rate at the short-term garage that remained unchanged at $20, while the maximum daily rate at the long-term garage increased $1 to $16.
Parking usage at the short-term garage increased 4.6 percent since Oct. 1 compared with a year ago, Zink said, despite the rates doubling from $1 to $2 for each additional 20 minutes up to the $20 daily maximum.
It's not the punch line to a joke, but rather a bizarre event that you have to see for yourself. In the spirit of Halloween, even the Parking Industry can become a little weird.
JNL Parking can help keep you away from these scary investments! Happy Halloween!
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.
In the spring of 1979 Jerry Buss had a serious problem. As he flew over the Las Vegas desert thoughts of his meeting with Jack Cooke raced through his mind. Cooke had set a deadline and the escrow company had put in a final call for $3 million to close the deal on buying the Los Angeles Lakers.
Dr. Buss’s problem was that he was completely tapped, and his meeting with Cooke to work out a deal for the remaining $3 million had not gone well. He had less than 24 hours to come up with $3 million or watch his dream of owning an NBA team evaporate.
We can only speculate on what he was thinking on the flight back to LA, but the 1 hour flight must have seemed like an eternity. Like most winners in life, he exited the plane and immediately began to work.
His business partner Frank Mariani was able to secure a $2 million loan and Buss was able to secure the remaining $1 million from another investor. Then, with only a few hours left, Buss’ investor dropped out leaving him and his partner $1 million short.
With time continuing to work against him, Buss was forced to turn to an unlikely ally who many did not want to be indebted to... Donald Sterling (future owner of the Clippers).
While Jerry Buss became ridiculed for paying a record price for any sports franchise at the time, and being leveraged to the hilt, Buss was able to see not just a price tag of $67.5 million dollars for the transaction, but 3-4 separate assets within the purchase that if broken up could produce significantly more value than one asset alone. He would go on to prove his critics wrong.
Similar to the Lakers transaction, we advise our investors to look beyond the initial price tag or cap rate in order to see value where other investors do not. We look at three simple parameters when valuing any parking asset. These parameters are very similar to Dr. Buss’s investment model and help investors determine their own cap rate.
1) Are there other income producing assets that can be broken off and sold separately?
In the summer of 1979, after closing the Lakers deal, Dr. Buss embarked on a similar model to that we use for parking.
Rule #1 (Look for additional or increasing sources of Revenue)
Or as Chick Hearn, the long-time voice of the Lakers used to say, “The game’s in the refrigerator! The door is closed, the lights are out, the eggs are cooling, the butter is getting hard, and the Jello-O is jiggling”
On March 27th 2012, the news broke of the sale of the Los Angeles Dodgers by Frank McCourt to an investment group led by former basketball star Magic Johnson and the Guggenheim group for an eye popping $2.15 Billion dollars. The sale of the Dodgers was almost three times the previous record set by any MLB team (Chicago Cubs just 3 years earlier). The sports community was intrigued, the business community perplexed, and the general public shocked. How could a man that was bankrupt, unable to meet his team’s payroll, and hounded by legions of attorneys relating to his ex-wife’s divorce pull off such a shocking deal? In just 8 years time, McCourt was able to purchase arguably one the most historic Major League Baseball franchises - with no money out of pocket (pledging his parking assets in Boston) - and turned it into a $2.15 Billion dollar pay-day.
The media had gone so far as to make fun of his business background by labeling him “the parking lot attendant” and publicly mocked him by telling him to leave LA and to return to Boston to park cars.
In a case of irony, McCourt must have listened to his critics, because behind the headline of the $2.15 Billion sale, very few people noticed that he actually took the media's advice and really did return to parking cars. You see, in the $2.15 billion dollar sale of the Dodgers, he negotiated to keep the parking lots and have the Dodgers lease back the property to his newly created company, “Blue Land”.
McCourt, through Blue Land, purchased the parking lots for $140 Million, while leasing the parking lots back to the Dodgers for $14 Million annually. While a 10% Cap rate may seem like a good deal, when one considers that McCourt paid in essence nothing for the land, it becomes the mother of all cap rates, payback periods, and sweet revenge.
If we analyze this further and apply a 6% cap rate to value the parking asset, we find that the value of his parking lot at Dodger Stadium is worth an estimated $233 Million! (and as much as $1 Billion in redevelopment value although JNL believes that one day the land deal will be worth more than the $2.15 Dodger deal). Furthermore, there are steep increases built in beginning in 2015 and every 5 years thereafter.
In a hypothetical case, the Dodgers are landlocked (talk about striking out), and may have no choice but to pay any price that McCourt could demand in the future. If you think that the Dodgers can do anything about it, they may not be able to. If McCourt decided to increase the annual parking lease to $150 million annually from the current rate of $14 million, the Dodgers might have to pay. If he increased it to $300 million annually, the Dodgers might have to pay. In fact, short of moving the team to a new location, they are at the mercy of the Parking Pirate (as some bitter fans have called him). Whatever nicknames McCourt may have accumulated during his time with the Dodgers, we at JNL prefer to call McCourt, the "Parking Genius".
If the Guggenheim group had contacted JNL, we would have negotiated a deal to keep the parking lot for the group, or at least purchase a controlling interest in Blue Land. Although not verified, according to some unconfirmed sources, the parking contract could expire as early as 2025, after that, watch out! Blue Land could change their name to Blue Sky.
Don’t be taken by parking pirates, baseball bandits, or land sharks. At JNL Parking we can help you negotiate a sale of your parking asset that will not leave money on the table, or expose you to some risks that may have been previously unforseen. In fact, we have been contacted by owners to help analyze their expiring leases, negotiate longer term leases with current clients, and to research fair market values for their lots and garages.*
Contact JNL Parking today to avoid striking out.
We’re ready when you are,
John & Lance
* This article was written as a case to illustrate the power of a parking investment in relation to sports and contracts. The figures used in this article are not a case of insider information, but rather information widely available. This is not a criticism of any party involved in the above mentioned transactions and is simply an educational op-ed piece by JNL Parking.
We're not sure if this is the future of parking or just the latest parking fad. What we do know is this is a great way to add value to your investment. As any staffed parking business owner knows, payroll is almost always the biggest expense of running a parking lot. The parking unions must just love the thought of these these!
Hate Valet? Not to Worry; Help Is at Hand
By ALEXEI BARRIONUEVO
ONE OF THE BIGGEST curses the wealthy must endure in their otherwise pampered lives is the dreaded valet parking. You toss the keys of your Bentley to a parking attendant, who ends up changing your radio presets, sweating on your seats or, worse, leaving a scratch on your pristine paint job. Is this the good life?
But imagine a different world, one free of such proletarian strivers. You pull into your high-end condo building, drive your car onto a steel pallet and shut off the engine. The glass door of the oversized elevator closes and you and your car are whisked upward at 650 feet per minute. The elevator stops on the floor of your apartment and deposits your car in your parking space. You get out and walk a few steps into your home. As an added bonus, a glass wall separates your private garage from your living room, so you can stare at your fine automobile from your couch, as if it were in a showroom.
That reality doesn’t quite exist yet in the United States.
But a Miami developer, Gil Dezer, has planned such a system for the Porsche Design Tower Miami, a luxury condo complex in Sunny Isles Beach, Fla. The development, which has already sold over half of its 132 units, is expected to be ready in early 2016. In the meantime, a smattering of residential buildings in New York, Miami and Los Angeles boast fully — and semi — automated parking systems that are time savers for residents, and space savers for developers.
To me it seems like the ultimate amenity for the car-obsessed. Parking attendants, however well-meaning, are human, and a parking garage can be a house of horrors, especially in a place like Manhattan, where every inch counts. And for celebrities and billionaires trying to keep their activities as secret as possible, who’s to say whether the friendly valet isn’t a tipster for a gossip blog?
“We have some celebrities who bought specifically because they don’t have to see any valets or security when they come into the building,” Mr. Dezer said. “They don’t need to sign autographs, they don’t need to take pictures.”
In New York only one building, 200 11th Avenue, where Nicole Kidman and Keith Urban reportedly own an apartment, has created a parking system that lets residents ascend with their cars to their apartments. And it’s not even fully automated. In fact it seemed fraught with peril at first glance. Residents drive into the garage and onto a car elevator, shut off the engine, and then, once the elevator has risen to their floor, have to back their car themselves into the private space next to their unit.
It sounded to me like a recipe for scratch city, especially with my poor driving instincts. But Leonard Steinberg, a broker with Douglas Elliman who lives in the building, designed by Annabelle Selldorf, and who worked on its development, said that residents had encountered few problems with the system since the building opened in 2010. He says the elevator does not operate until the car is shut off. When the resident arrives with the car at the apartment, a sensor automatically turns on the lights and an exhaust fan in the garage.
“The only area where you have to have a little bit of skill is backing up in your garage; beyond that it is pretty basic stuff,” said Mr. Steinberg, who acknowledged that he is the only resident who doesn’t have one of the private garages. “The people that live in the building and use this system are really loving it.”
The garages are enclosed concrete structures with walls that can contain a fire for three hours, making them safe as well as soundproof, Mr. Steinberg said. “If someone crashed into a wall they would be crashing into a foot thick of concrete. There is not one bedroom or living space that abuts the garage or car elevator.”
Two Manhattan buildings — 1 York Street in TriBeCa and 123 Baxter Street in Chinatown — have automated parking systems in which the resident pulls up and steps out of the vehicle, and then the system parks the car somewhere in the garage.
At 1 York, the developer Stan Perelman, who heads Jani Real Estate, said he researched systems around the world, eventually teaming up with a New Jersey company, Park Plus, which had licensed Swiss technology for use in the United States.
Residents who bought early in the building, like Michael Hirtenstein, were skeptical at first. “It just sounded a little kooky,” said Mr. Hirtenstein, who has a 10,000-square-foot apartment he combined from five and a half separate units. “But I think it is great. Whenever there is any little problem, the service company comes and fixes it.” He has three cars parked in the garage.
The resident drives into the garage and onto a turntable. If you go too far to the right or left the computer will tell you. After shutting off the car, you exit. Then the turntable rotates your car on the elevator (so it’s facing out when it’s returned). Metal teeth grab the car underneath the tires, and a trolley then breaks away, moving the car vertically and horizontally to one of the 40 parking spaces. It remembers where it parks people’s cars based on a key fob used to retrieve it later. The whole process takes no more than a minute, Mr. Perelman said. (Mr. Hirtenstein says it takes about 75 seconds.) Motion detectors prevent the system from moving the car while someone is still in it (say if you left a kid or dog in there).The Park Plus system is capable of allowing residents to call their cars from their residences with a remote-control device or cellphone, but Mr. Perelman decided to turn that feature off. “What if you call for your car and then you get a phone call?” he said. “Your car will sit there for 20 minutes. We didn’t think it was onerous to wait 30 to 60 seconds for your car.”
For the developer, the automated system saved money and space. Park Plus built the spaces for a little over $35,000 apiece, and Mr. Perelman sold them to residents for $150,000 to $250,000, depending on the size of the car. The cars are parked only two inches apart.
There have been hiccups since residents started using the system in 2008. One woman ignored the “fold in mirrors” sign, and her Porsche got stuck in the elevator; the laser sensor refused to move it because it was perceived by the elevator as overly wide, Mr. Perelman said. Then there was the time the elevator wouldn’t move a Mercedes when a huge piece of slush fell onto the turntable and blocked a laser sensor.
In Los Angeles — arguably the car capital of the country — the automated parking technology is just starting to be used in residential buildings. Christopher Alan, a developer, said the City of Los Angeles had been hesitant for years because of safety concerns. Now the potential space savings have suddenly become attractive, he said.
Mr. Alan created a company called AutoParkiT that builds automated parking systems in partnership with Omron, a Japanese company with a subsidiary in Illinois. He showed me the system this week in an eight-apartment rental building in Sherman Oaks. It seemed to function well. The company says it is the first, in California at least, to offer an automated parking system that does not require an attendant. He is seeking to install it in several other residential buildings in both Northern and Southern California, and said he had also had discussions with developers in Miami.
But no developer seems quite as ambitious as Mr. Dezer when it comes to parking for the super-rich.
In 2008, during the height of the housing crisis, Mr. Dezer found himself stuck with some 900 apartments in Miami he couldn’t sell. He signed a licensing deal with Porsche Design and molded a concept around a building for car lovers, vowing to do something that no one else was.
After researching auto-park systems in Europe, where they have been in use for more than a decade, he contracted with an engineer who had built a special car-parking system in Germany for Volkswagen. Mr. Dezer asked the engineer to modify the system to allow for heavier cars and for passengers to be able to stay in the cars. The Porsche Design Tower’s system will be able to accommodate cars up to 8,000 pounds, including the gargantuan Rolls-Royce Phantom and a Hummer H2, he said. To deal with fire concerns, the developer plans to install a sprinkler system.
Mr. Dezer is spending $24 million to build three car lifts that will each deliver cars to 44 apartments, but sees that as a cost savings over a multilevel garage. Every apartment will have two parking spaces; they are being sold to residents for $500,000 per pair. In a building where two penthouses of 12,000 square feet have already sold for $22.5 million apiece, it seems almost like an afterthought.
That may be especially true when you consider that a Rolls-Royce Phantom Aviator Coupé runs a cool half million these days.
Our parking career started in the dirt. Literally. We spent game days flagging down cars in the dirt lots around Notre Dame Stadium, with pizzabox signs and Sharpie markers, waving customers in to fill our lots. What we learned from those early days would become our guiding principles that would help parking investors make lots of money today.
We began purchasing dilapidated houses and dirt lots around the University of Notre Dame campus at double to triple what the properties were worth, because we held true to three driving rules of parking investing:
1. Parking is inelastic; it generates steady cash flow
2. Parking is a great hedge against inflation
3. Invest in great locations where land will appreciate
Rule #1 Inelastic Demand, and Steady Reliable Cash Flows
In our early days, we saved a lot of pizza boxes for game days because our prices changed according to demand. With our Sharpie in hand, we changed prices according to our lot capacity, game popularity, and at other times, just because we could. With parking investments, unlike other real estate investments, prices are very fluid and reliable. You can change parking rates monthly, daily, or even hourly according to demand and most customers will pay because they don’t have a choice (try changing the monthly rates on your tenants at your apartment building or your office space mid-month, and see if they stay).
Rule #2 Hedge Against Inflation
Parking assets are also the best protection against inflation of any investment. According to the US Department of Labor, inflation (CPI) rose at a rate of 1.7% in 2012, while parking rates nationally (according to Colliers annual parking rate survey) grew at a rate of 1.6%, while increasing 3.7% in major cities. In the city of Chicago alone, rates jumped 9.4%.
Rule #3 Appreciation of Land Value
Three years after we purchased the land next to the campus and ran them as parking lots, we were able to sell the land to developers at many multiples what we paid for the properties. Within just 2 years, our parking investment was worth a lot more as a development.
Notre Dame Area Condos Planned
September 21, 2006 | HEIDI PRESCOTT South Bend Tribune Staff Writer
As land becomes scarce, parking lots and garages are always the first targets for developers. You want to acquire parking assets in places where your investment will continue to appreciate in value, while you collect valuable parking revenues.
East 13th Street, LLC., – a partnership of DHA Capital and Continental Properties closed on the purchase of a 45,000+ square foot parking garage in Greenwich Village. The property, which sold Dec. 5, 2012 for $32 million at slightly more than $700 per square foot, is located at 12 East 13th Street and will be converted to luxury condominiums.
How Investors are Blinded by Cap Rates
Just as in our early days, people scoffed at the values we were paying for our parking investments. They claimed that we were crazy, delusional, just plain stupid, and that we would never make our money back. If we had focused on valuing the investments purely based on a Cap Rate and not on our three rules, they would have been correct.
Don’t be misled by the initial CAP rate on your parking investment; we will take a CAP rate of 5% in Chicago over a CAP rate of 8% in Nebraska any day. If you follow our third rule, your CAP rate in Chicago will be 8% in three years while your CAP rate in Nebraska can go down to 5%.
Demand for parking in cities, airports, sporting venues, hospitals, etc., is not going away. This is good news if you own a parking business, bad news if you want to get into one but continue to wait.
We’re ready when you are,
John & Lance
Birth of the Parking Stall
In 1898, Delegates from across the globe gathered in New York City for the world’s ﬁrst international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by...horse manure.
The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure.
All efforts to mitigate the problem were proving woefully inadequate. Stumped by the crisis, the urban planning conference declared its work fruitless and broke up in three days instead of the scheduled ten.*
During the late 1800‘s Americans depended on the horse for all aspects of their lives. In fact, as human population in some cities rose an astonishing 108 percent, horse populations increased over 300 percent during the same time period. This meant that horses had to be fed, maintained and most importantly...parked.
In booming areas such as New York City, a very lucrative business was born. By the turn of the nineteenth century 4,600 boarding stables had been developed to park 74,000 horses. In prime areas such as “Stable Row” in the Upper West Side on Amsterdam Ave, boarding rates soared and the value of the land began to increase.
As the automobile began to replace the horse just decades later, many of the parking stables were converted into parking garages and the value of the properties skyrocketed. By 1907 there were just 681 stables left, and 71 parking garages had been constructed. Twenty years later, all of the stables were gone, and 394 parking garages had given birth to the Parking Stall.
Death, Taxes, and Increased Parking Rates
In an annual ritual that has become as predictable if not as joyous as a New Year’s Eve countdown to midnight, Chicago drivers again will have to dig a little deeper to pay to park at meters in 2013.
- Chicago Tribune, 12/27/2012
It’s been said that there has been a parking shortage since the day that vehicles were invented. Today there are 254.4 million vehicles registered in the United States and vehicle sales have enjoyed double digit growth in the last few years. In fact, most of these vehicles operate in heavily populated cities where there is scarce amount of parking. Combine this with the fact that it took our country 237 years to reach the current population of 315 million people, but will only take 37 years to nearly double that figure, and you have a formula for unsustainable parking demand.
Supply and demand would dictate that more land would simply be converted to parking to help fill the gap, but beware of the invisible hand. The free market intervention of government agencies disrupts supply and demand and helps create artificial imbalances. In most cities, government agencies block the construction of new parking facilities while overwhelmingly supporting the conversion of existing lots and garages.
Salt Lake City Council bans demolishing buildings to create parking lots.
-Salt Lake Tribune, 11/27/2012
There are very few expansion options available in crowded cities, and as parking lots and garages are taken off-line for construction of high rises, availability of spaces dwindles. This is bad news for consumers, but as parking investors this represents the shining moment of opportunity.
An application has been filed to raze the eight-story parking garage at 75 Howard Street and build a 284-foot building with 160 condos in its place.
-San Francisco Business Times, 12/14/2012
To put it into a simple formula:
Exponential Population Growth + More Vehicles = More Parking Demand - Available Parking Spaces = Increase in Rates + Increase in Value of Parking Business
It’s What We Do
At JNL Parking we will help you find a profitable parking business, help you get top dollar for your existing parking business, or offer consultation services for your existing operations. We help hedge funds, REITS, and private capital groups acquire strategic parking assets to help their businesses expand.
Unconventional Parking Investing
We can also help investors with as little as $10,000 or investors who wish to diversify their parking portfolio by introducing them to a Parking Investment Fund that invests in parking lots and garages. Parking assets can be expensive and require experience to operate; this option gives investors the opportunity to get invested without the operational risk and capital limitations. If you are interested, click here to be contacted directly.
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
Installing solar panels in parking lots is brilliant. You have the space, you have the sun, why not profit from it. The best part is the added benefit of less snow removal in snow locations. The opportunity to kill your electricity bill or even sell back the electricity is going to be hard to pass up.
They Paved Paradise and Put Up A Parking Lot (2012 Version)
Wall Street Journal
September 17, 2012
Parking-lot owners are finding a new use for their vast expanses of pavement: solar power.
From Long Island to the Arizona desert, developers are covering their lots with canopies of solar panels. Lot owners get to double up on their use of underutilized land and to offset their utility bills at the same time. And very little stands between most lots and the sun, so they can produce plenty of power. What's more, the canopies provide shade when it's hot and prevent snow from accumulating in the winter. Some have charging stations for electric vehicles.
The Washington Redskins last year completed the largest parking-lot solar installation in the NFL. (Sports stadiums are famous for their acres of open parking lots.) The team covered 841 parking spaces at FedExField in Landover, Md., with electricity-producing awnings; the two-megawatt system can supply 20% of the stadium's power needs on game days and all its electricity on off days.
NRG Energy Inc., Princeton, N.J., installed and owns the panels, leasing the site and selling power. The company and the team both declined to disclose financial details about the project.
One of the country's largest solar carports is now under construction at Rutgers University's Livingston Campus in Piscataway, N.J. The eight-megawatt installation will cover about 32 acres and will cost about $40.8 million before federal and state incentives. The project is being built by a private company, which will lease the panels to the university. Rutgers expects to save $28 million in electricity costs over 20 years.
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