The Newest Residential Buyers: Sports Cars?
- Oct 19, 2007
This summer, a New York Times article about parking introduced non-New Yorkers to a shocking concept: the $225,000 parking space.
Think that sounds high? Some New Yorkers don’t — there’s a waiting list for those spaces in Manhattan.
If that price tag blows your mind, considering we’re in the midst of a national housing decline in which homes are losing value, the concept of the auto condo — essentially a purchasing living space for several high-end cars — likely won’t make much more sense.
But some developers are revving up to build them all the same.
- Luxury on Main, opening late next year in Los Angeles, will have 80 "auto condo" units. Most will be 650 square feet, Autoblog reports.
- San Jose’s Club Auto Sport will feature up to 70, 660- to 10,000-square-foot car condos in addition to a clubhouse, concierge, electronic security systems owners can access 24 hours a day and a conference facility, the San Jose Mercury News reports. Condos will be priced from $250,000 to $2.8 million.
- And then, there is Dream Garage in Dallas. The $10 million complex will feature 54 units, each a minimum of 1,050 square feet (enough for four cars), priced at $230,000, according to the Dallas Morning News.
Many condos will feature bathrooms, showers and kitchens or bars, and Dream Garage is going to build a club area for socializing. Owners will also be able to use the Dream Garage dual dynamometers, which will tally horsepower as cars drive on to large floor rollers.
Cars, Not Consumers
The housing market news seems worse every day — new construction has dropped because housing demand has dropped, and reports of condo developments being canceled as a result are rampant. (The Washington Post reported in August that nearly 20,000 condo units in the past 12 months have been removed from the construction schedule in the DC area alone.)
How, then, did former racer Jack Griffin, who owns a Dallas real estate and brokerage company, get funding for a residential structure for cars?
Fairly easily, it seems. Several months ago, Griffin approached Tres Vista Group to garner additional resources for Dream Garage. It signed on as a partner.
Dream Garage, in fact, now has all its financial backing and zoning approvals in place, Tres Vista partner Jerry W. Mooty Jr. told the Dallas Morning News.
That’s more than we can say for a number of new residential complexes. Why?
Smart Development, High Demand
One possible reason Dream Garage got support: it’s hitting a niche audience. Collectible cars are a $3.5-billion industry, according to American Collectors Insurance. Offering high-end storage space is an untapped market.
Plus, given that owners can easily spend more than $230,000 on their car collection, it stands to reason they’d spend that to store it.
"We think this concept is unique," Griffin said. "Warehouses are just storage. They’re dark, they’re dusty. People want more than that now."
Another possible reason: Dream Garage will be a mixed-use complex, also housing the American Driver magazine offices, a paintless dent-removal company and an Autoscope, which is a garage specializing in BMW, Audi, Porsche and Mercedes-Benz repairs and high-performance work.
The commercial space use is likely to provide an additional revenue stream and also, because the residents are auto industry-related, give car fanatics an extra purchase push. That’s clever planning.
And it’s planning some developers may want to consider. Packaging commercial, which has remained stronger through most of the slump, with residential projects may make investors feel more secure, help safeguard against market instability — and spark that rise in new construction we need.
Likewise, planning highly targeted projects — addressing the needs of consumers who are still looking to buy despite the slump, from first-time buyers looking for no-frills property at reasonable prices to retirees looking to downsize — is now more essential than ever to a project’s success.
That’s a concept Griffin understands.
"We envision [Dream Garage to be] a lot more than just a place to store a car," Griffin said "A lot of us view cars as art, and we want to have a place where we can see these rolling galleries."
Which might explain why his development, unlike so many other new construction projects is rolling along.
Talk to us: Do you think auto condos will be a hit with buyers? Will they have a high resale value? Post your thoughts below.