What do you think a parking space in Downtown Denver is worth?
Before you read the article, answer what you think the value of a parking space might be in any of the Downtown Denver Hi-Rise Residential Towers.
Let’s talk Parking
As property values have increased in the Denver marketplace, buyers and sellers are looking at their parking spaces more closely for the value they hold and the options they have with them.
Within downtown hi-rise residential towers such as the Glass House, SPIRE, and ONE Riverfront parking spaces are a finite resource. There are only so many spaces in the building and, barring some impressive act of construction, they won’t be building any more. For those who live in these buildings supply is fixed. Demand, however, varies based upon your individual lifestyle.
How Parking Spaces were originally allocated to units
How was parking originally allocated to units. Lets take a look at two different examples, the Glass House and SPIRE.
Glass House Parking
When the Glass House sales occurred (2005/2006) every unit in the building was assigned one parking space, and the Penthouse units were assigned two parking spaces. The Penthouses were often assigned premier parking spaces, or those the developer deemed to be in a better location. Parking spaces are located from the basement through the 7th floor, and if you purchased a unit on one of these floors your primary space would have been on that same floor. If you bought above 7 your parking space might be anywhere in the garage. But regardless of where you bought in the building, you were guaranteed at least one parking space.
Then the sales began. Those who purchased a two bedroom were allowed the opportunity to buy an additional space. Those who bought a one bedroom were not allowed this opportunity. There were not enough spaces for every two bedroom to buy an extra space. That is why you may find a two bedroom for sale in the Glass House with just one space. Either they original buyer opted out of purchasing a second space or the additional inventory was sold out at the time they purchased.
These additional parking spaces were originally sold for $15k, but only for a very, very, very limited time before being raised to $25K. Then later, perhaps due to the rapid pace of sales, the parking space prices were raised to $40K which is where they remained through the duration of the initial sales process. These parking spaces are common limited elements that require paperwork to be registered with the city for a transfer to occur.
Since then parking spaces on the resale market are rumored to go for upwards of $55K.
SPIRE approached parking a little differently. Units were offered with no parking spaces assigned to the unit and buyers were given the option of buying spaces from a tier priced inventory. What was the tier? Parking spaces in better locations were priced higher than those in less desirable locations.
For example, you might find a first floor parking space priced for $55K while a parking space on the top parking level might have been sold for $25K. The logic being that a parking space on a lower lever required less driving and turns in the garage than a space on a top floor. If you live in the building for 20 years, how many minutes might you save by having a lower floor parking space.
SPIRE parking spaces can be individually deeded, as you can see by the most recently recorded sale in the MLS for a parking space that sold for $70K. That’s quite a lot of potential value wrapped up in a parking space.
SPIRE originally offered no parking spaces based on the potential buyer who might live a car optional lifestyle. The building offered LEED certification, access to the light rail, a nearby B-Cycle station, car sharing by Hertz on the first floor, and an incredible walk score. From a buyers perspective one could buy a condo in Downtown Denver for a very attractive price point by skipping the added cost of parking.
So when we look at SPIRE resales you might find 2, 1 or no parking spaces for any given unit.
This trend in parking is allowing Sellers to experiment with new twists in how they sell their units. It’s possible to break apart your condo and your parking space to seek an increased total sales price, especially if a buyer is willing to spend $70K for the parking space on its own.
In either building, homeowners can explore the option of selling a parking space to supplement their income. This can be very desirable for those who love the Downtown lifestyle and don’t require a car.
When you don’t need a car
Denver has gotten extremely friendly to car optional buyers. The new Union Station hub offers light rail access throughout the city and as of April 22nd a new rail line will offers service to Denver International Airport. In addition RTD offers bus service and the light rail service routes are planned to grow over the upcoming years.
Denver also offers a great bike sharing service with Denver B-Cycle and healthy competitive pricing among the many car sharing companies that are working to build an audience within our city. When all else fails, Uber, lyft, a taxi or the other transportation companies are just one call or click away.
And my favorite aspect of Denver is the walkability and bike friendly nature of our city. Denver offers 300+ days of sunshine, bike and walking trails, pedestrian and bike bridges, and an expanding network of bike friendly road lanes to help those who prefer to move about the city under their own steam maintain a car free lifestyle.
For those who don’t want a car, Denver is a great city to live in and these high rise building are perfectly located to make it happen.
As a buyer or seller of real estate this lifestyle can save you thousands. Owners of condos with parking spaces can enjoy the option of renting their spaces for income or selling the spaces for one large lump sum. Renting does offer the benefit of changing your mind, should you decide to sell down the road and desire an offering that includes pricing.
As a buyer who doesn’t require parking you might find a better priced option for a condo listed without parking or you can make plans to sell or rent the space after you close. Not every space might sell for $70K, but you can ask our team to give you an idea of what a parking space might fetch on the open market.
When you need one or two spaces
For some parking spaces are deemed a necessity. Many downtown residents require two parking spaces, something that is more likely in a two bedroom than in a one bedroom. For example, non of the Glass House one bedrooms were sold with two parking spaces, a challenge for many couples.
Buyers who purchase a two bedroom residence are more likely to have two spaces accompanying their purchase.
For those who require two parking spaces but only have one there are options. Many take advantage of the occasional rentals within the building that are often listed for approximately $200 a month (at least at this time). Others keep a sharp eye out for the even rarer opportunity to buy a space from another resident.
Yes, parking spaces do occasionally come on the market for a transfer between residents. However these instances are infrequent and, as you might imagine, prices are rising. If you are considering buying a unit that does not have the parking you require we recommend you plan to rent for an uncertain amount of time. Parking spaces are often available for rent within the building for around $200 while spaces outside the building (at various locations downtown) can be found for less. Plan to wait and keep your eyes peeled for a space to be offered, they go fast.
The Future of Parking
The future of parking is uncertain in Denver. With ongoing development of public transit and more telecommuting opportunities the requirements of condo buyers is constantly changing. However the past few years have shown two trends in the market. First, parking spaces are becoming more valuable as our density builds up and parking options become more limited.
This is shown by the steady increase in the resale prices of parking spaces and the lack of supply. You are more likely to see a sign “Parking Space wanted” on the building message board than the rarely found “Parking Space for sale” sign. This lack of supply is keeping those who rent out their spaces fully booked year after year.
On the other hand, car free living is becoming a more popular trend. Transit oriented development has been booming due to the freedom and cost savings it can generate.
In Denver public transportation options, grocery store locations, services and amenities across our metro area are growing even more rapidly along with density growth. This enables car optional and car free living to be more easily accomplished. The trend of living car optional is not slowing down, from millennials who have realized how much of their budget they can free up living car free to empty nesters who don’t require a car in their retirement to young professionals who live in Denver just like New York City… car free.
Pick your lifestyle, pick your dream home, and then factor in parking. With the prices we are seeing on these parking spaces it’s worth its own conversation.
Update to this Post: October 2016
A Glass House Parking Space was offered for sale for $60,000 and a Glass House Storage Unit for $10,000.