AMP Capital, Northleaf to acquire largest US parking asset

The deal represents AMP Capital’s first investment in North American infrastructure through its Global Infrastructure Platform.

A tie-up between  Northleaf Capital Partners  (Northleaf) and AMP Capital  (AMP) has reached an agreement to acquire the largest underground parking system in the US from garage operator LMG2. 

An AMP spokesperson said told Infrastructure Investor that AMP was attracted to the investment for its stable and predictable cash flows and the strong protections built into the existing concession agreement to operate the Chicago Downtown Public Parking System. It is the asset manager's first investment in North American infrastructure through its Global Infrastructure Platform. 

Millennium Garages recently completed a two-year-long revamp including capital improvements, stabilisation of operational performance and launching a new marketing campaign capitalising on growing demand for parking and related services. The strategy has led to increased patronisation and customer satisfaction, according to LMG2.

Chief executive Michael Nichols said LMG2 had been actively seeking an investor with long-term interest in the asset for about six months.  

“The Northleaf and AMP Capital team was selected after extensive due diligence and we are committed to working with the City of Chicago through the upcoming approval process,” he said. 

Northleaf managing director and co-head of infrastructure George Zakem said the long-term exposure to US economic growth provided by the investment fits into “a key focus area of Northleaf's investment strategy”. 

Macquarie acted as financial advisor for AMP and Northleaf in the transaction with law firms Allen & Overy and Barnes and Thornberg serving as legal advisors. On the sell side, Evercore was financial advisor to LMG2 with Kirkland & Ellis, and Fox, Swibel, Levin & Carroll serving as legal advisors. 

The 3.8 million-square-foot facility comprises 9,176 parking spaces in four underground garages located beneath Millennium and Grant parks. 

The City of Chicago has up to 60 days to review and approve transaction terms. Specific terms of the agreement are to be shared at the time of closing, which is expected to come shortly after the city decision is announced.