Buyers of luxury condominium units have a new place to park their cash: in their parking spots.

As parking becomes more scarce in major cities, developers are offering private parking spots costing as much as $1 million.

In cities like San Francisco, New York and Boston, parking prices have reached an all-time high. At least two new developments in Manhattan are asking $1 million for a single parking spot. Condominium developers are touting parking spaces with glossy brochures and promotional videos, marketing the small patches of concrete as luxury amenities.

Price tags are rising as parking options become scarce in major cities. Until recently, the rule of thumb for San Francisco developers in prime, central areas was to build one parking space for every unit, the maximum allowed by the city planning department in some locations, says Alan Mark, the president and CEO of the Mark Co., which handles sales and marketing for condo and apartment buildings. Now, the maximum allowed in many central locations is an average of half a parking space for each unit, after a change in local rules.

Prices now run as high as $125,000 for a single parking space in a prime San Francisco neighborhood, compared with $40,000 to $70,000 per spot several years ago, says Mark.

For about four times the cost of an average single-family home in the U.S., buyers can purchase a parking space in New York’s Soho. At 42 Crosby Street, a 10-unit luxury building under construction in Soho, 10 underground parking spaces are asking $1 million—more on a price-per-square foot basis than the units upstairs. The building’s developers declined to comment.

At 15 Renwick, also in Soho, there are three parking spots priced at $1 million each. Tim Crowley, director of new development at Core, which handles marketing for 15 Renwick, says parking is priced at a premium because developers hope the spots will be sold with the building’s two penthouses, priced between $7 million and $11 million.

Jonathan Miller, president of appraisal firm Miller Samuel, says the highest actual sales price he’s seen for a single parking space in Manhattan is $325,000. Million-dollar parking spaces, he says, aren’t anything close to market rate, but rather are priced proportionally to the high price tags of units in the building. 

A single parking spot typically requires about 300 square feet of space, including aisles and driveways—roughly the size of a small studio apartment, says Jeffrey Tumlin, the director of strategy at Nelson\Nygaard, a transportation consultant. The median construction cost for a parking spot in the U.S. is about $20,000.

Source: http://www.marketwatch.com/story/the-1-million-parking-spot-may-be-just-around-the-corner-2015-09-11