Price For Parking Turf Gets Hefty

by Glen Richardson

A single parking space in the ritzy 42-story Spire high-rise downtown on 14th St. has sold for $74,000. The outlay sets a new record for the price to park and live in a condominium home in the heart of downtown.

Space 131 in the garage of the condo tower — a chic retreat in downtown’s Theatre District — topped the previous $70,000 price tag set last June for another Spire space, according to BusinessDen who first reported the sale. The city’s homepage for business news said broker-owner Mark Trenka of Century 21 handled both Spire deals. The third priciest was a $67,000 sale last May in the Brooks Tower on 15th St., the city’s first high-rise residential building. Trenka also represented the buyer in that deal.

While Valley residents regularly confront parking predicaments, most hope to get lucky on the street or opt to rent a spot. People who have condos in the heart of downtown, however, in certain cases have the option of buying a space in their building’s parking garage. They just have to be ready to shell out what you would pay for a 2017 Maserati Ghibli S Q4 for the privilege.

Parking Poker

Pricey parking — spaces on the resale market regularly sell for from $25K to upwards of $55K — provides a metaphorical look at how the price for parking is adding to the cost of living under the city’s Denver Moves transportation arrangement. Mile High’s bike and pedestrian plan has installed dedicated bike lanes throughout downtown thoroughfares, a move that’s gobbled up scores of parking spaces created for residents and tourists on Denver’s streets.

Then there’s Cherry Creek North: Apartment towers, condos and hotel construction in the once swanky shopping district forced the Cherry Creek Shopping Center to implement a paid parking system to protect the mall’s parking for its own customers. Commuters, construction workers and people living or shopping in Cherry Creek North used the 5,001 mall parking spaces, making it tough for mall patrons to find a spot.

Most residents literally pay for parking even if they don’t use it. If you live in a condo or apartment that includes parking, that parking comes with an extra fee or is tucked into your mortgage or rent. Moreover, many multi-family residential buildings have more parking than their residents require. Someone has to pay for those spaces. Someone also has to pay for the fact that a $75 monthly parking fee doesn’t fully cover the cost of creating it.

Spending Spiral

Spire originally offered no parking spaces to potential buyers despite having seven levels of parking. Thus, today when buyers look at condo resales they might find two, one or no parking spaces for any given unit. This trend in parking is allowing sellers to experiment with how they sell their units. It’s possible to break apart a condo from the parking space to seek an increased total sales price. This becomes especially true when a buyer is willing to spend $70K for a particular single parking space where they live.

It can, however, be difficult to get a mortgage for just a parking space. Most non-cash buyers opt for a loan on the value of another property they own, or reappraise the condo based on the addition of a parking space, and then get a mortgage based on that new figure. Individuals who purchase a parking space will likely owe more in HOA fees since they will then own a slightly greater percentage of the building. According to Century 21’s Trenka, a space in Spire’s garage comes with $22.68 in monthly HOA fees. At Brooks Tower that figure is $79.36 a month.

Many buildings assign at least one parking space to a unit, but often offer additional spaces as sales incentives once site sales begin. That’s why future buyers at a particular condo may only find one space offered. In some cases, of course, the original buyer may have opted out of purchasing a second space. At Denver’s Glass House condos in LoDo additional parking spaces originally sold for $15K, but were later increased to $40K. Pricey condos, nevertheless, typically include parking spaces. In Cherry Creek North at the still under construction Laurel Cherry Creek Condos, the 11th floor penthouse comes with three parking spaces for just under $4 million ($3,999,467).

Density’s Price

How much does a parking spot add to a condo mortgage or an apartment’s rental fee? Experts say there is no single answer to the question. Construction costs are affected by soil conditions, zoning requirements, site constraints and the type of parking to be built. Furthermore, initial capital cost varies based on property taxes and cost of financing. For rental properties, resident turnover and delinquency rates are added factors.

Seemingly cheap parking at apartment complexes can be costing renters as much as $250 a month. The point: an apartment with parking space costs more to build than one without. The typical fees for apartment buildings don’t generally cover that difference. In many cases developers create more parking than a building actually needs so they have the option to convert to condos as the market changes.

Bottom line: parking spaces are becoming more valuable as density downtown and throughout the Valley builds up and parking options become limited. This is exposed by the increase in the resale prices for parking spaces and the lack of supply. Residents — whether owners or renters — are increasingly likely to see “Parking Space wanted” signs on the building message board. Moreover, as the price of parking spots soars condo “Parking Space for sale” signs are increasingly likely to also be listed.