Downtown parking juggernaut

The availability and cost of parking downtown is now a linchpin in business and employee decisions

The new determining factor for where to lease an office in downtown Honolulu these days has to do with an increasingly precious commodity -- a parking stall.

"It's almost the first question we have to figure out for a tenant," said Jamie Brown, president of Hawaii Commercial Real Estate LLC. "We eliminate buildings from potential consideration because they don't have parking."

WHAT IT COSTS Honolulu's parking rates have taken off amid growth in the state's economy: Rates: Parking rates have gone up more than 10 percent over the last two years. Cost: The rates can range from $115 to more than $300 per month for reserved spots.

Whereas a few years ago, he said, price and location were at the top of the criteria list for office tenants, the attention has now shifted to parking availability and prices. That's because the alternative parking options that used to exist no longer do.

Many office tenants are now basing decisions on whether to move, expand, not expand, or lease a new space, on the number of parking stalls that come with the deal.

With the office vacancy rate on Oahu at 7.7 percent, landlords now have the upper hand.

Parking rates have gone up more than 10 percent over the last two years, according to Jeffrey Hall, senior director of research for CB Richard Ellis Hawaii.

The rates can range from $115 to more than $300 per month for reserved spots, typically for tenants only. Some garages, such as at the Davies Pacific Center, are creating new tiers, like reserved premiums, at $340 per month.

Honolulu's monthly unreserved rate of $190.50 is above the national average of $153.19, and ranks No. 12 among 49 metropolitan areas across the United States, according to the 2006 Parking Rate Survey by Colliers International.

Parking rates went up nationwide in the past 12 months, and are expected to continue rising.

Dylan Yamashita, a landscape designer for PBR Hawaii, said he opted to take the bus after weighing all his options.

At Bishop Square, he would be shelling out more than $200 per month to park in the garage. But Yamashita didn't want to pay $100 to park at a garage a few blocks away in Chinatown either.

"It's not worth it," he said.

Even unpaved, uncovered parking lots, such as one run by District Parking Service in Kakaako, are charging up to $110 monthly for a spot.

Parking ratios shrinking

Parking ratios, in some buildings, are also shrinking.

Typically, the amount of office space being leased will determine how many parking stalls a tenant is allotted.

The standard has been about one stall per every 500 to 1,000 square feet leased by the tenant.

But that ratio is shrinking, according to brokers, as office spaces get tighter.

Hall said the average ratio, at the moment, is at about one stall for every 900 square feet leased for class A space. For class B, it increases to one stall for every 950 square feet leased.

Hall said he expected at least another 10 percent increase in parking rates by the end of this year.

The Topa Financial Center, which offers more than 900 parking spaces, sticks to the one-stall-per-500-square-foot ratio. But even Topa may be considering an increase in its parking rates to keep up with the market in the next two to three months, said General Manager Curt Nakamura.

Companies also are packing more employees into offices, increasing the density of workers per square foot as rental rates go up.

"Businesses are putting more people in fewer square feet," confirmed Brown. "There's this constant drive to reduce operating costs, and how to do more with less. Basically, they're maxing out capacity of existing buildings and parking structures with extra people."

Parking is no longer an expected perk provided by employers, even at prestigious law firms. When you do the math, there just aren't enough stalls to go around.

Most employees are on their own for parking -- and considered lucky if they have the option of paying for a stall within the same building.

Even spillover garages, such as Chinatown Gateway and the Arts at Marks Garage, are filled to capacity.

The Arts at Marks Garage on Nuuanu Avenue run by ProPark, for instance, has a waiting list with more than 100 people for its unreserved parking spots, at $156 a month.

"We're overflowing," said manager James Passion. "We're abundantly overflowed. Our prices are reasonable compared to some of the other garages."

Passion said more downtown workers are parking now at the garage, which previously served the Hawaii Theatre and art gallery crowds.