The last time there were this many high-rises going up in Orange County, parking for the buildings was an afterthought.
Now, finding the space,and the money,for parking structures at new office and condominium towers has become one of the biggest deciding factors on whether many of these projects can move ahead.
“The dynamics of the industry are changing,” said Al Carroll, senior vice president of parking structures for the Newport Beach-based office of McCarthy Building Cos.
About half of the cost of a parking structure is tied to concrete and steel, which have seen some of the biggest price spikes in recent years. Concrete costs have jumped about 15% in the past year alone, while steel prices are up 19%.
“Prices are skyrocketing, and it is putting (developers) under a lot of pressure,” Carroll said.
More than 80 floors of office space totaling about 2 million square feet are at various stages of development here, according to Greg May, senior vice president for the Newport Beach-based office of Grubb & Ellis Co.
That means a minimum of about 8,000 parking spaces need to be built for the office buildings. A conservative estimate puts the cost to build that office parking at $120 million to $150 million, according to construction company officials.
Some office developers are pushing to squeeze more spaces into their parking structures,as much as 10 spaces per thousand feet of office space, said Mark Thurman, president of Lake Forest-based contractor ARB Inc.
That’s in line with shopping centers but more than twice the norm for office buildings. It also adds to the costs of a project, Thurman said.
Among larger projects in the works, St. Louis-based McCarthy is building a 1,802-vehicle structure for The Irvine Company’s 20-40 Pacifica project in the Irvine Spectrum.
ARB is building a six-story, 580-space structure for Hines Interests LP’s 2211 Michelson Drive office building.
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Opus parking structure: scaled back stores because of parking issues |
Meanwhile, Anaheim Hills-based Bomel Construction Co. is building a 6.5-level, 682-vehicle structure for the Irvine Co.’s building going up at Irvine Center Towers near John Wayne Airport.
Bomel also is building a six-level, 2,765-space structure at Maguire Properties Inc.’s new tower at Park Place in Irvine. Maguire plans another five-level, 1,380-unit structure at Park Place.
Maguire is building extra parking to “clean up parking problems we (inherited) when we bought the property,” said William Flaherty, senior vice president for Maguire, at a recent forum sponsored by the OC chapter of the Urban Land Institute.
High land prices are changing the way developers go about building parking structures. Most sites now designated for office towers or high-rise homes don’t have the luxury of building a big parking lot alongside the buildings.
“There’s a dwindling availability of land to park on, and the price of that land has been driven through the roof,” ARB’s Thurman said.
Developable land can run upward of $200 per square foot. That makes a sprawling parking lot out of the question.
“Any type of new office development or high-density (condo) project is including structured parking in their plans,” Carroll said.
That usually means more expensive underground structures, particularly for condo towers. Some cities frown at big bulky structures alongside buildings.
About 1,000 high-rise homes are planned for Santa Ana. In Costa Mesa, 1,500 condo towers have been proposed. And 1,700 tower homes are built and in the works for Irvine. Most of these projects have at least partially underground parking structures planned, based on initial plans.
Underground parking can cost upward of $45,000 per stall,more than the value of most cars that would park in them.
The figure is roughly three times what it costs to build an aboveground parking structure, according to Matt Montgomery, director of real estate development for the Irvine office of Phoenix-based Opus West Corp. The developer is building three condominium towers off Jamboree Road in Irvine.
Cost and spacing issues for parking caused Opus to scale back stores planned alongside the three towers, Montgomery said. It’s a challenge factoring the daytime parking of a shopping center alongside homes that mostly need parking on evenings and weekends, developers said.
Homebuilders shoot for two stalls per residence. The costs can add up quickly. For a project like Santa Ana-based Nexus Co.’s 349-unit MacArthur Place condo tower near the Costa Mesa (55) Freeway, parking construction is likely to run close to 10% of the project’s $350 million cost.
The price of underground parking easily can rise if there’s contaminated soil or water issues to deal with, ARB’s Thurman said.
Then there’s the time factor. Pushing parking under a development usually adds three to four months to the construction project.
