close
Parking spaces

Demand for parking spaces fuels growth of city garages

By April 2020, the number of vehicles in the city had dropped by two-thirds, to just over 9 million cars, from a year earlier, according to city records. But a year later, vehicle traffic was almost at pre-pandemic levels, with 25 million cars on the road. By October 2021, that number had returned to more than 27 million cars, on par with 2019 levels, according to city records.

Last year, the city also added 538,330 newly registered vehicles, a 34% increase from 2020, according to the state Department of Motor Vehicles.

Monthly demand for garages in residential neighborhoods like the Upper East Side has recovered now that New Yorkers are returning to the city in droves, said Chicago-based SPPlus chief strategy officer Chris Sherman. His company runs about 250 garages in New York and recently leased up to 20 that were previously operated by Icon Parking.

He added that he is also seeing an increase in demand for short-term parking in office districts and for hotels around Times Square.

A parking condo at 15 William Street in the Financial District, operated by Icon Parking, is now for sale. It has 200 parking spaces and is located below a building with 320 apartments.

Rent there costs Icon about $1 million a year, but landlords are selling it to raise money for a separate project, broker Eric Anton said.

New York’s Centerpark is another business in growth mode, citing higher demand than before the pandemic. The company recently acquired two Midtown garages from Muss Development for $8.3 million which are currently operated by Icon Parking, adding 40,000 square feet of parking space to its portfolio of 20 facilities.

Centerpark expects to end the year with 26 garages under its belt and has spent $100 million over the past three years to approach owners and grow its portfolio.

“Overall, we’ve done well, more post-pandemic than during,” said the company’s chief executive, Gregg Reuben.

Demand was low at the height of the pandemic, so the company filled its spaces with monthly rather than daily parking lots.

“We also found that transient parking recovered very quickly. Even though there weren’t many people and we’re hovering around 40% in terms of office occupancy, the percentage of people driving into town is much higher than it was before. the pandemic,” he said.

The company’s revenue in 2021 was up 15% from 2019, he said, both due to an increase in demand for spaces and also because it raised its prices. 5% overall. The company now charges between $500 and $800 per month for a spot depending on the garage.

On the other hand, Icon, which has nearly 200 garages in its portfolio, collectively owes its owners more than $20 million, according to multiple lawsuits.

Since the start of the pandemic, Icon has claimed in court documents to have lost income and said he has been unable to pay rent to the owners of the garages he rents out. But attorneys representing the owners say they uncovered a scheme in which Icon diverted revenue from its garages, which are operated under individual LLCs, to a large master bank account to make the garages appear insolvent.

There are other garages Icon walked away from because they were underperforming and in default, said Deborah Reigel, an attorney at Rosenberg & Estis representing multiple owners in the lawsuits.

“The cool thing about Icon is that they don’t give up all of their space,” she said. “They’re trying to pick and keep some of their garages.”

Icon Parking did not respond to a request for comment.

Owning a garage as a landlord isn’t always lucrative, said David Schwartz, director of the Slate Property Group. His company builds affordable housing around New York.

“Many developers wouldn’t build a parking lot if they didn’t have to,” he said, referring to city parking regulations in outlying boroughs. “I wouldn’t build most of my garages if I didn’t have to.” He added that they are expensive to build and do not generate much revenue, especially if they are smaller.

Schwartz advocates congestion pricing to reduce the number of cars on the road, but doesn’t think that will continue to be a problem in the city much longer.

“New York City can’t grow if we depend on cars,” he said. “I think in the same way that the stories of New Yorkers moving to Florida are a short-lived phenomenon, I think it will be a short-lived phenomenon as well.”

Deena S. Hawkins

The author Deena S. Hawkins