Wednesday, September 10, 2014

Elite Luxury, Now in Parking Spaces


If you're a liberal, socialist-leaning Democrat, are you sitting down?  The news I'm about to share with you may sound like an egregious example of self-indulgent capitalism run amok.

If you're a right-wing, free-market Republican, however, this same news will probably strike you as little more than what it literally is:  the new benchmark for the price of parking spaces in Manhattan.

And the new price now being asked for a parking space in Manhattan?  How about a cool, round $1,000,000?

Yes, that's right:  One million dollars.

For a rectangular patch of concrete on which you can park your car.  In the yet-to-be-built condominium project called "42 Crosby Street" in SoHo.

Granted, nobody has actually paid $1 million for one of these parking spaces yet.  So far, the highest price a parking spot has ever commanded in Manhattan has been $345,459, paid in April, 2012, for a parking spot in deeply trendy TriBeCa.  Two other parking spaces, being sold as a set to compliment a $50 million Greenwich Village penthouse, are priced at $1 million for the pair, but both they and their associated condo are still on the market.  So it remains to be seen if the parking space market in SoHo will actually have any takers at $1 million for one space.  After all, per square foot, that price is more than what the luxurious apartments are going for up above the garage.

At least these are garage spaces, sheltered from New York's sometimes dangerous streets, with their car thieves, petty vandals, and clueless drivers, many of whom play bumper-cars with other vehicles already parked along a curb just so they can get their car into a parking space.  The market for off-street, sheltered parking has been climbing for years, but the current average across Manhattan runs about $136,000 per space.  Indeed, high-density New York has a demand for such a product, and you might also be surprised to learn that there are actually about a dozen cars being made right now with pricetags of at least $1 million.  So it's not like paying $1 million for a spot to park your $1 million automobile is all that unrealistic.

Especially considering New York's already famous excesses.

Still, selling a parking space for one mil mostly makes for a splashy, provocative angle to pitch these new apartments.  42 Crosby Street's developers need some gimmick for their project to stand out in Manhattan's hyper-competitive housing market.  These extra-high-dollar parking spaces aren't located in some run-of-the-mill parking garage; they're in an exclusive building being built on what's currently - ironically - a parking lot.  And there are only 10 spaces available; one for each apartment in the building.  These apartments average around $9 million apiece in price, except for the building's $25 million duplex penthouse.  So we're not talking about dozens - or hundreds - of buyers in a skyscraper being wooed with million-dollar parking spots.  Still, these boutique buildings like 42 Crosby Street are all the rage right now, and they tend to all look the same.  This project's developers have already gone through two other designs for their building, and they spent $16 million on that old parking lot.  They've gotta get some cash coming through the door to start paying these bills that are beginning to pile up.

So, who would pay that kind of money for a parking space?  All things considered, with New York's residential real estate market being as hot as it is, the prices for apartments in 42 Crosby Street seem fairly realistic, but it likely won't be traditional wealth buying them.  Most old money already owns comfortable real estate holdings in Manhattan, and rich people who've lived in the city for years tend to leave their personal automobiles at their country homes, and let chauffeur-driven vehicles get them around Gotham.  And as far as needing to keep one's personal vehicle close at hand, a lot of people buying into this price point have employees and staffers who can fetch the family's Bentley down the block at a moment's notice.

Can you say nouveau riche?  Because that's the market 42 Crosby Street is likely targeting.  Who else but new money would jump at such an opportunity?  SoHo has become the place to be and spend for sassy technology entrepreneurs and young Wall Street bankers, as well as Russian and Chinese tycoons who are looking at foreign real estate as a reliable place to park some of their cash.  To people like this, $1 million for a parking space isn't illogical, but a bragging point, and something with which to dazzle both one's poorer family members, and one's desired peer group, further up the social ladder.

Hey - for centuries, New York City has been built by and for these people.  In a way, this is simply the next era of conspicuous consumption for the capital of the world.  "Capital" in more ways than one.

Still, can you imagine living in an apartment building filled with people willing to pay $1 million for a parking space?  It's a good thing there are only 10 apartments at 42 Crosby Street - any more, and the hedonistic narcissism of its residents would likely make the place utterly unbearable.  What would these people do if there was a fire in their building?  Who'd get out first?  What about the parties they'd likely throw, and all of the demands they might make for customizing their apartments in ways that inconvenience other tenants?

Of course, all of this is pure speculation.  Shame on me for being so cynical.  Some people would say I'm simply jealous of rich people.  So, perhaps there are ten families worth millions of dollars who are entirely nice, quiet, kind, selfless, easy to get along with,  and are looking for just the right apartment in Manhattan where they can protect their family minivan regardless of cost.

Yes, I'm sure there are plenty of .01 Percenters out there who are perfectly wonderful people.  But what makes them wonderful people almost certainly are qualities that would otherwise prevent them from spending $1 million for one parking space.

Liberals would say that no self-respecting humanist would waste that kind of money on a patch of concrete to park a fossil-fuel-burning machine.  And right-wingers would say it's none of our business, as long as whomever purchased those parking spaces can afford to do so.

Meanwhile, moderates like me say "just because you might be able to, that doesn't mean you should."


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