At a time when many parking companies are struggling to stay profitable, a Canadian upstart has gobbled up garages totaling over 3,000 spaces combined in downtown Chicago to establish a sizable presence in the nation’s third-largest city.
Within the past two months, Clermont has paid well over $100 million to buy four Chicago garages with a combined 3,237 spaces, according to Cook County property records and CoStar data.
The buying spree from late March to early May comes at a time of uncertainty for the industry, about a year after investor Ardian and parking company Indigo Group announced they were forming a joint venture to invest in parking properties in Canada.
The new parking facilities investor, Clermont, is led by former Imperial Parking, or Impark, executive Gordon Craig.
It’s unclear whether the Chicago deals are Clermont’s first forays outside Canada, and the company did not respond to requests for comment from CoStar News.
Clermont’s newly acquired properties are two near Millennium Park, one alongside the sprawling Merchandise Mart in River North and another in the heart of the Loop business district that was owned by Chicago real estate billionaire Sam Zell, who died in 2023.
Downtown parking operators have faced waves of new challenges in recent years: increased rideshare usage cutting down on car parking at hotels and restaurants, a shift to remote work after the onset of COVID-19, and worries that other cities could follow New York’s lead and enact congestion pricing.
Amid what many analysts consider a severe oversupply of parking, some cities have eliminated parking minimums as part of future developments. In Chicago, developments near public transit have no parking requirements.
Still, new players such as Clermont and a group that last year bought out Icon Parking, New York City’s largest parking company, have stepped in to compete for a reduced number of customers. In some cases, they have done so by acquiring parking structures at steep discounts to past valuations.
Chicago acquisitions
CoStar News this month reported Toronto-based Clermont’s nearly $12.4 million purchase of the quirky, Stanley Tigerman-designed garage at 60 E. Lake St., often referred to as the Rolls-Royce Garage, from InterPark. That property has 210 spaces.
In other deals not previously reported and also involving InterPark as the seller, Clermont paid $70 million for the 1,018-space garage at Randolph and Lake streets just west of Millennium Park and $12.5 million for the 567-space MartParc Orleans across the street from the Merchandise Mart.
Separately, Clermont bought the loan on the sprawling 1,442-space Washington Madison Wells Self Park long owned by Zell at 172-190 W. Madison St. and took possession via a deed in lieu of foreclosure. That form of voluntary surrender was agreed to in advance by the seller, a venture of Zell’s Equity Group Investments, and the lender, Northwestern Mutual Life Insurance, according to CBRE marketing materials.
It's unclear from property records how much Clermont paid for the discounted loan, but someone familiar with the deal estimated it was half the original loan balance of $52.5 million that the Zell venture borrowed in 2016.
Northwestern Mutual and Equity Group Investments did not respond to requests for comment from CoStar News.
The Milwaukee-based insurance company provided a new $18.9 million loan to Clermont to back the transaction, according to online property records.
All of the Chicago garages acquired by Clermont have ground-floor retail. Brokers for the Madison Street and River North garages marketed them as potential redevelopments in the long term, with JLL's MartParc brochure showing a rendering of a residential high-rise on the site.
The Madison garage already has switched uses twice, having been converted from a parking garage to offices in the early 1970s before Zell owned it.
In 1994, the Chicago Tribune reported that Zell’s firm was switching the 12-story office structure back to parking, connecting it to a neighboring 970-space garage to create today’s far larger capacity.
For the record
The Washington Madison Wells sale was brokered by CBRE’s Blake Johnson, Arthur Johnson, David Knapp, Michael Hassler and John Saletta. The Randolph Street sale was brokered by Newmark’s Nicholas Bicardo and Cheyne Bloch and Colliers' Mike Senner, Ben Greazel and Joel Simmons. The MartParc sale was brokered by JLL’s Sam DiFrancesca, Bruce Miller, Dan Reynolds, Jaime Fink, Patrick Shields and John Mason.