SAN FRANCISCO—San Francisco parking woes continue, with construction costs and city policies contributing to fewer structures being built in the foreseeable future. As of the last San Francisco Municipal Transportation Agency survey in 2010, the number of parking spaces in San Francisco was nearly 442,000 including 19 city-owned garages and that count has roughly remained unchanged, according to SFMTA.
Some of these spaces often have long-term parkers or are limited to permit or customer only. And, the barriers to future garage construction are too high for the city to contemplate, Rob Malone, acting director of parking for SFMTA, tells GlobeSt.com.
If a private project does get approved, “It is common to have a very large office development of 30 to 40 stories built with a very small amount of parking, say 200 to 300 spots,” Mike Robertson, managing principal of Walker Parking Consultants, tells GlobeSt.com. “And, the construction cost per space is roughly $20,000, making it necessary to charge $50 to $60 per day to recapture costs.”
Moreover, the average monthly tenant rate for those lucky enough to get an assigned garage or lot space in the heart of the financial district has increased by 9.43% from $404.25 in 2010 to $442.38 in 2015, according to CityPark's director of marketing, Spencer Sechler.
Zip cars, Uber and mass transit have heeded the call as has technology. Apps that search and compare available real-time parking options, and reserve spots with a credit card on file, are offered by a variety of companies. Other services pair property owners with would-be parkers (AirBnB for cars) to allow rental of parking stalls and driveways.
Still another service, Luxe, the San Francisco-based on-demand parking service, connects drivers with trained and pre-screened valets via its iOS and Android apps. This service provides a valet driver at a pre-determined destination who will park a car in a secured lot and return it to the owner for pick up at a specified time.
"The fact is, 90% of Americans have to drive to work or to daily appointments like visiting the doctor, and in major metropolitan areas, parking costs have continued to rise as inventory in parking garages is reduced,” says Luxe's CEO and cofounder, Curtis Lee. “Luxe's model creates efficiencies and cost savings for consumers."
In the last six months, Luxe has reported demand in core cities of San Francisco and Los Angeles, with the average customer parking with Luxe two times a week, 90% month over month growth in customers and 97% growth in transactions month over month. Because of that demand, Luxe recently announced it has secured Series A financing of $20 million from lead investor, Venrock, as well as Redpoint Ventures.
As part of the funding round, Brian Ascher of Venrock and Ryan Sarver of Redpoint Ventures will join Luxe's board of directors. Luxe's team is also backed by investors behind consumer technology giants, Uber, Sonos, Netflix and Nest, and led by a veteran consumer technology team with experience from Zynga, Google and Tesla Motors.
"Parking in the core of most cities is a nightmare and apps that list garage locations, parking prices, or handle payments have not solved the problem," says Ascher. "Luxe's service-oriented solution turns a headache we all routinely encounter into an awesome experience."
The funding paves the way for national expansion of its service by mid-2015, beginning with the addition of Boston, Chicago and Seattle this quarter. Luxe will focus on building a presence in those major urban hubs where parking has become increasingly difficult and expensive.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
