Randy Nichols parked his assets in the right place.
The head of Denver-based Nichols Partnership sold a portion of the Clayton Lane parking garage next to the neighborhood’s Whole Foods for $14.9 million last week, according to public records. That’s $75,000 a space.
The deal comes almost exactly a year after Nichols purchased the 198 spaces for $6 million. Based on the sale price alone, that’s a 150 percent gain in 12 months.
The buyer was Clayton Lane Investors LLC, a partnership between Brookfield and Invesco Real Estate. That entity owns the rest of the parking garage, as well as the retail portion of the entire Clayton Lane project, which includes the Whole Foods, a shuttered Sears store and other units.
The deal is significant because Clayton Lane Investors has previously discussed redeveloping a portion of Clayton Lane, including demolishing the parking garage — a move that was complicated by Nichols owning a portion of it.
The purchase would seem to be a key step forward. But the ownership group hasn’t released any new information on its future plans in years, and a Brookfield spokesperson didn’t respond to a request for comment Wednesday.
Randy Nichols declined to comment.
A right of first refusal pays off
Nichols is the original developer of Clayton Lane, and built the parking garage. In 2003, the firm sold the 198 spaces within the garage to the city for $4.3 million.
Jeff Steinberg, the city’s director of real estate, told Denver City Council members in 2018 that the spots were purchased so the city could rent them out for cheap rates to Cherry Creek retail workers.
At the time, the shopping district had few parking meters, so workers parked on the street, which made it challenging for shoppers to find a spot.
In early 2016, meanwhile, Clayton Lane Investors purchased the retail component of Clayton Lane, including the other portion of the parking garage. The partnership then expressed interest in buying the 198 spaces from the city. In January 2019, the council voted to approve that sale for $6 million.
But the spaces weren’t sold until June 2020 — and Nichols Partnership was the buyer.
That’s because terms of the previous 2003 sale stated that, if the city later wanted to sell the 198 spaces, it had to give Nichols the first opportunity to buy them — a concept known as right of first refusal.
“We had this right of first refusal, and we looked at the price and felt it was a bargain, knowing the cost of constructing parking in an area like Cherry Creek,” Randy Nichols told BusinessDen last June.
Clayton Lane Investors sued both Nichols and the city in June 2020, in a last-ditch bid to prevent the sale. That failed.
Now, 12 months later, Clayton Lane Investors owns the 198 spaces. But it paid $8.9 million more than originally planned.
Owners mum for years on redevelopment
Clayton Lane Investors was originally a partnership between Invesco and a company called OliverMcMillan.
In 2016, now long after purchasing Clayton Lane, OliverMcMillan displayed renderings at a national real estate conference showing a new Whole Foods within Clayton Lane, erected on what is currently the store’s parking lot.
In 2017, the partnership submitted redevelopment plans to the city, proposing to replace the Whole Foods, the parking structure and the former Sears with six buildings atop a network of underground parking.
But little has been said publicly about the project since then. OliverMcMillan was acquired by Brookfield in 2018.
At the end of that year, when Clayton Lane Investors thought it would soon own the entire garage, a spokeswoman for the entity told BusinessDen the planned purchase was “not any kind of triggering event for redevelopment of the site.”
Speaking to BusinessDen last year, Nichols said the 198 parking spaces he owned weren’t the only thing the owners needed to start work. Whole Foods is in the middle of a long-term lease on its existing building, he said.
Elsewhere in town, Nichols is developing the five-story One Platte office building at 1701 Platte St. The company also plans to redevelop the Art Institute of Colorado building at the edge of Cap Hill.