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Developers Tell Condo Buyers: You Don’t Need To Bring Your Car

Posted by Yijy8kNUMO on December 12, 2017

At Lumina, a 42-story condo building in San Francisco, homeowners pay anywhere from $900,000 to $15 million for a luxury residence with a one-car limit per unit. Alternatively, homeowners can ditch the car, get a credit of $10,000 and rent one of the building’s eight luxury cars when the need arises.

The developer, Tishman Speyer, partnered with Audi on a pilot program called Audi at Home, in which residents can use an app to rent one of the building’s eight luxury vehicles parked near the valet area. Rates run from $12 to $22 per hour, and the fleet gets about 100 rentals per month.

The program encourages occasional drivers to forego ownership and eases some traffic within the garage, says Carl Shannon, senior managing director at Tishman Speyer. “It has made it less imperative [for buyers] to have their own private automobile, says Mr. Shannon of the 656-unit building.

Luxury developers are increasingly offering car-rental and car-sharing services, as well as creative parking solutions to their residents. Touted as an amenity to upscale buyers, these services benefit developers, too, since they reduce the size of parking garages and lower building costs.

“For developers, it’s a drain on economics” to build parking garages, says Todd Runkle, an Austin-based principal at global design firm Gensler, which specializes in commercial development. “We are in a transitory period to see how much we can reduce parking.”

Gensler is also designing some parking structures with level floor slabs that can more easily to convert to office space or residential living spaces once parking ramps are removed, he adds.

Fueling the trend are municipalities—including New York, Miami and Chicago—that have eased minimum parking requirements when developers offer alternative transportation options. The goal is to reduce traffic congestion and free up street parking.

At 1000M, a luxury 74-story tower scheduled to begin construction next year in Chicago, developer JK Equities will provide an average 1.3 parking spots per unit, says Jordan Karlik, principal at the New York-based developer. To encourage car sharing and ease traffic in the garage, the building will provide a luxury SUV and driver to transport homeowners to places within a three-mile radius.

Scheduled for completion in 2021, 1000M will have 323 condo units that range from $557,000 to $8.5 million, based on preliminary pricing.

The SUV service will be available on a first-come, first-served basis. Anticipating that demand for the car service will be strong, the company plans to lease leftover parking spots in the garage to car-sharing services, Mr. Karlik says. Still, the units are more marketable with the in-building parking option, he adds. “People are still attached to their cars.”

Likewise, Pacific Gate in San Diego still offers two parking spaces to buyers of two- and three-bedroom units, even as it offers a fleet of four luxury vehicles and a boat. The transportation amenity is offered to draw in buyers rather than reduce parking spots, says Bemi Jauhal, director at San Francisco-based Bosa Development. Buyers “want their cars, but don’t realize they won’t use their cars,” she says.

When Lisa Haile moves into her three-bedroom condo at Pacific Gate in March, she’ll bring her Maserati but sell her luxury SUV. Owning two cars “won’t make sense anymore,” says Ms. Haile, an attorney who is relocating from a single-family home in San Diego.

Ms. Haile declined to disclose the price of her condo, but similar units in the building are listed for $2.8 million. While use of the shared vehicles is free, roughly $106 of residents’ monthly fees will go toward the transportation amenity, according to San Francisco-based Bosa Development.

Luxury rental units are offering similar perks. In Manhattan, residents at the Solaire can use ReachNow, a BMW-owned car-sharing service. The service, launched in 2015, has allowed Angeli Gianchandani to get rid of her car and a nearby parking spot that cost $700 per month. Ms. Gianchandani says the car-sharing amenity is just one of the environmentally friendly offerings of the 293-unit building, which already uses solar energy and green cleaning products. “It really played into all of the values of the building,” says Ms. Gianchandani, a marketing executive who pays about $90 per day for the service.

After moving into 50 West, a condo building in New York’s Financial District, Birgit Gregori was hesitant to part with her car, which she wanted to use for weekend trips with her husband and two teenage sons. So she uses DropCar, an app-based valet service that will park residents’ cars within 4½ miles of their building and deliver it to the front entrance at a scheduled time. The building’s developer, Time Equities, contracted with the valet startup to offer the service to residents at a reduced rate. For Ms. Gregori, DropCar is far cheaper than paying $700 a month for her to park her car in a nearby garage. In addition to valet service, DropCar offers a $15 per hour driver-waiting service. Ms. Gregori uses it when she needs a driver wait with her car when she’s hopping in and out of her vehicle for errands. “This gives me flexibility,” she says.

Some developers of buildings that offer transit amenities are already seeing a downturn in parking interest from residents, says Greg West, president of Zom, an Orlando-based luxury-apartment developer. Currently, 23% of residents opt to rent at the developer’s 2,000 or so downtown Miami-based apartments without parking—a number that grows annually, he says. Zom’s parking garages are now at least 30% smaller than those in the developer’s previous buildings. Front entrances offer larger driveways to accommodate car sharing, he adds.

At one of its buildings, the developer recently turned part of an underutilized parking garage into a dog run. “We really have to think about our buildings with people arriving more often on their feet or in someone else’s car,” he says.

Some developers are getting more creative about how parking spots are used. At Centro in Miami, developer Harvey Hernandez worked with the city to allow residents to use about 300 parking spots at a nearby office building that sit empty on weeknights and weekends—exactly when the building’s residents need it most. In hurricane-prone Miami, underground garages can be especially costly to construct, he said; by avoiding the expense, he was able to keep sales prices lower for units in the building.

 Mr. Hernandez spent six months negotiating with the city to demonstrate that the modification would not be a drain on nearby parking availability. It worked. Because of the competitive pricing, units “basically flew off the shelves,” says Mr. Hernandez. Centro’s 352 units, which range from $190,000 to $500,000 were all sold pre construction for nearly 20% less than comparable units in buildings with on-site parking.

Corrections & Amplifications 
The luxury tower 1000M in Chicago is expected to have 323 condo units when it is completed, and no rental apartments. An earlier version of this article incorrectly stated that it would have 307 condo units and 199 rentals. (Dec. 7, 2017)

Source: The Wall Street Journal, December 7, 2017 10:12am

Author: Alina Dizik

Image Credit: Steelblue

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