Buy Condo, Then Add Parking Spot for $1 Million

The New York TimesSeptember 09, 2014

What will $1 million buy in New York City? A diamond-encrusted Cartier men’s watch. A small fleet of 2014 Bentley Continentals. Or maybe your very own parking spot in SoHo.


A new development, 42 Crosby Street, is pushing the limits of New York City real estate to new heights with 10 underground parking spots that will cost more per square foot than the apartments being sold upstairs.


The million-dollar parking spots will be offered on a first-come-first-served basis to buyers at the 10-unit luxury apartment building being developed by Atlas Capital Group at Broome and Crosby Streets, itself the former site of a parking lot. At $250,000 a tire, the parking spaces in the underground garage cost more than four times the national median sales price for a home, which is $217,800, according to Zillow.


So instead of a 5,000-square-foot house with a wine cellar in Dallas or a 3,500-square-foot home with a sauna in Seattle, one could choose 150 square feet in the basement of 42 Crosby, a condominium designed by the architect Annabelle Selldorf.


The parking spots, some of which will be a generous 200 square feet, will run $5,000 to $6,666 a square foot, whereas the nine three-bedroom units upstairs will cost between $8.70 million, or about $3,170 a square foot, and $10.45 million, around $3,140 a square foot. Monthly common charges for operational expenses and taxes for the three-bedrooms will run as high as $8,880 ($18,360 for the $25 million duplex penthouse). But the parking spots, which also provide a bit of storage space and a charging station, if not views, will not rack up additional monthly charges.


In Manhattan, where luxury condominiums and their lavish amenities have been commanding stratospheric prices, the million-dollar parking spots are strategically priced. The median sales price of a Manhattan apartment has been tickling the million-dollar mark, reaching $920,000 in the second quarter of 2014, while apartments at the ultrahigh end have been selling for more than $90 million.


“We’re looking at setting the benchmark,” said Shaun Osher, the founder and chief executive of the brokerage firm CORE in Manhattan, which is handling the sales and marketing at 42 Crosby. “In real estate, location defines value and parking is no exception to that rule.”


In SoHo, Mr. Osher said, there are “few to no options” for parking, let alone a private spot in your own building.


The number of off-street parking spaces in the city was 102,000 in 2010, or about 20 percent less than in 1978, when there were 127,000 spots, according to the Department of City Planning. While scarcity is a factor in the price of parking, $1 million for a parking spot may still be a reach.


Last year, a private garage with space for two cars at 66 East 11th Street was listed for $1 million by the Manhattan real estate firm Delos. It is still available in conjunction with the sale of the building’s $50 million dollar penthouse. In April 2012, a parking space at 60 Collister Street, a loft condominium building in TriBeCa, sold for $345,459.


Over the past year, residential parking spots in Manhattan have been selling for an average of $136,052, according to Jonathan J. Miller, the president of the appraisal firm Miller Samuel.


Buyers at 42 Crosby Street who pay $1 million for a parking spot will not actually own it. The condo is selling 99-year licenses for each spot. A license, unlike a deeded parking spot, entitles buyers to use the space as long as they are residents of the building and requires that it be sold in the event of a move.


To build the 10 spots, the developer had to get a special permit from the city, which typically limits the number of parking spaces in new buildings to no more than 35 percent of the units.


Parking spaces in new developments across Manhattan are selling at a brisk pace. At 56 Leonard, a 145-unit TriBeCa tower codeveloped by Alexico Group and Hines, 25 of the 28 parking spots were listed for sale in May at $500,000 apiece; all were sold within months. There is a waiting list for the remaining three spots, which the developer is holding to offer to the buyers of two remaining units. A penthouse in the building went into contract for $47 million in June 2013.


“When someone is paying $50 million for an apartment, another $500,000 for the luxury of not walking a block or two and having your own spot, I guess it becomes a rounding error,” said Izak Senbahar, the president of the Alexico Group.


Beth Fisher, a senior managing director of Corcoran Sunshine, which is marketing 56 Leonard, said: “The No. 1 amenity is parking. In the luxury market, parking is really one of the key, key features that distinguish one development from another.”


In other cities where parking is scarce, residential parking also sells at a premium. Last year, a tandem parking space sold for $560,000 at 298 Commonwealth Avenue in the Back Bay neighborhood of Boston. In central London, “a secure underground parking space in Knightsbridge is now 350,000 pounds,” or $565,859, said Giles Hannah, a senior vice president at Christie’s International Real Estate. That is roughly the same price as a studio apartment in the London borough of Camden, he said.


“Most ultrahigh-net-worth individuals have car collections as well as service vehicles for their staff,” Mr. Hannah said. “Parking is in serious demand and has proven an excellent investment with no sign of a decline.”