Manhattan’s last lots
Developers have long been snatching up parking lots, but there are still a number of them in play — and ripe for development
Try finding a place to park below 59th Street in Manhattan and you might discover that lots with available spots are hard to come by. That’s because as developers have snapped up parking lots and garages for real estate projects over the past decade, about a third of the land used for parking has disappeared.
And more is destined to vanish. On the West Side, where the bulk of the lots and garages are located, it’s hard to find a piece of oil-stained land that doesn’t have a developer’s name on the deed. Yet a number of parking properties — many owned by small companies — could still be in play as development sites. More than 45 percent of the land still used for stowing autos in prime Manhattan is located in some of the city’s most active development markets, including in Hudson Yards, West Chelsea and Hell’s Kitchen, according to an analysis of data from the Department of City Planning by The Real Deal.
“The West Side is the darling of development sites,” said Eastern Consolidated broker Adelaide Polsinelli, adding that it’s no longer as easy to make a profit with a parking lot. “The climate for parking is not the same today as it was 10, 20 years ago, when the city was more of a commuter-friendly, car-friendly environment.”
In total, about 3.57 million square feet south of 59th Street — or roughly 23 full-length blocks— is used today primarily for parking. (The city data captures a variety of parking uses, including public lots and garages, parking used by companies such as FedEx or U-Haul and publicly held properties like bus depots.)
Some of that land is already lined up for new real estate projects, like the site on the corner of 34th Street and 10th Avenue, where real estate giant Tishman Speyer is planning a $3.2 billion office tower. But other sites are up for grabs — or might be, if their owners can be convinced to sell their land.
In the 11 years since 2003, about 34 percent of the land classified as parking in Manhattan below 59th Street was redeveloped for other uses, according to TRD’s analysis of the city data.
But while it may seem like parking lots are constantly being targeted by developers, the reverse is often true. Real estate firms often hire parking companies to manage their sites while waiting for property values to appreciate or while assembling other plots nearby.
“Frequently, our clients are developers who hire us to run surface lots and operate them as parking until they’re ready to push the ‘build’ button,” said Michael Wolf of Standard Parking, which operates more than 100 lots below 59th Street. “They may raze a building and pave the lot and keep generating a little bit of income.”
Much of the parking giving way to development today lies in Hudson Yards, where firms like the Related Companies, Brookfield Office Properties and Tishman Speyer are now pumping billions of dollars into real estate projects.
Of the 31 parking lots between 30th and 42nd streets on the West Side — an area once most noted for rail yards and an abundance of parking around the Lincoln Tunnel — more than half are either slated for development or owned by development interests. A number of those that remain are held by some of the biggest names in parking real estate.
For example, Edison Properties, a New Jersey–based company known for sitting on at least a dozen prime development sites in the city, owns and operates a large parking lot on the west side of Ninth Avenue between 35th and 36th streets, surrounded by properties held by Joy Construction, hotelier Sam Chang, Raber Enterprises and Sherwood Equities.
The company, which owns Edison Park Fast and Manhattan Mini Storage, operates lots on coveted sites, including a pair of large parcels along the High Line and a block-through assemblage between 28th and 29th streets in Chelsea that the company has been buying up since 1980.
Meanwhile, Meyers Parking, which was founded in the 1920s and once owned more than 200 international properties, still owns at least three garages in or near Hudson Yards today: one running block-through on 34th Street next to the Hammerstein Ballroom, another block-through garage on 31st Street opposite Madison Square Garden and a third on 31st Street, across from the Farley Post office.
Today the company is run by Allan Gordon, an investment banker, attorney and Broadway producer. Neither Meyers nor Edison responded to requests for comment.
Development isn’t quite as frenzied to the north in Hell’s Kitchen, at least not yet. But projects like Fortis Property Group’s condo development on West 49th Street and the Spanish hospitality company Riu Hotels & Resorts’ 27-story tower on Eighth Avenue have already gobbled up some of the neighborhood’s parking lots.
On 51st Street near 12th Avenue, the Park-It Management company owns and operates a large parking lot running through to 50th Street. The company, run by the father-and-son team of Fred and Gary Spindler, owns a number of lots in neighborhoods such as NoMad, Tribeca and West Chelsea, including a four-story garage at 249 10th Avenue next to the Della Valle Bernheimer–designed condo hugging the High Line.
Fred Spindler told TRD he is frequently approached about selling his properties, but that the company is not interested.
“We get calls all the time. We just hang up on the brokers,” he said. “We’re not interested in selling at all.”
Broker David Carlos of Savills Studley said the Spindlers are not alone in wanting to hold onto their sites.
“They’re a perfect example of a company with a lot of assets, and they’re really not necessarily motivated by somebody giving them a bag of cash,” explained Carlos, who said parking owners are sometimes amenable to property swaps instead of sales.
“You’re dealing with wealthy individuals who, for the most part, have owned their properties for a long time and want to maintain a real estate portfolio.”
Next to the Spindler’s property at the northeast corner of 12th Avenue and 51st Street is a parking lot owned by Kingdom Garage, run by Max and Masoud Kian, who own several other lots on the West Side, including a trio of properties in Hudson Yards they’ve leased long term to developers Joy Construction and Maddd Equities. The Kians could not be reached for comment.
At least six parking lots and garages on blocks traversed by the High Line are either owned by developers or are slated for construction.
Among the buildings set to rise is Related’s Zaha Hadid–designed condominium at 520 West 28th Street. Related paid $29.9 million for a 14,800-square-foot parking lot at the site at the end of 2012.
Other coveted properties in the area not yet picked up for development include the garages owned by U-Haul on 23rd Street, a two-story parking garage on West 25th Street owned by the family-run Winter Organization and a four-floor parking garage on 20th Street, serving as both a garage and home to the ZieherSmith art gallery.
Savills Studley’s Carlos said the U-Haul property is often eyed by developers, but that selling is not particularly attractive to the company because it would need to buy a replacement site in the current frenzied market in order to keep operating.
Enclosed parking garages, in particular, have many features that make them attractive for apartment conversion, industry sources said. For example, many of the prewar garages have high ceilings and were built larger than current zoning rules allow for new construction.
Josh Schuster of the development firm DHA Capital, along with co-developer Continental Properties, estimated that he saved about $5 million in materials and construction costs by converting a former garage at 12 East 13th Street into an eight-unit condo, rather than building from the ground up. The company was also able to generate income while it waited on construction permits by operating the garage until the company broke ground.
An added bonus: since the building has a certificate of occupancy for a garage full of cars, the developer was allowed to provide parking for each of the eight units, as opposed to the two parking spaces that city regulations would otherwise allow.
Schuster said DHA already has two other parking-garage conversions on the horizon in Williamsburg and the West Village and is looking for more sites. “I’ve got guys in my office mapping out garages and parking lots all over the city,” he said.