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Lease clause could halt coworking growth in Chicago; resort project gets $175M

Commercial real estate

* The rapid expansion of coworking in Chicago could soon come to a halt, as shared-office providers like WeWork Cos. Inc., Spaces and Industrious LLC take entire buildings off the market for competitors when they introduce a noncompete clause in their lease agreements, according to Crain's Chicago Business that cited a report by brokerage Cushman & Wakefield.

The noncompete agreements prevent rival coworking firms from operating in a building, where some coworking providers may have leased two floors. Consequently, coworking providers "control" 18 times the amount of space they actually lease in the central business district, the report added. Thirty such companies operate in Chicago today, according to the publication, which added that 62% of all quality building classes downtown are removed by noncompete agreements.

* Global finance and investment firm TPG Sixth Street Partners made a $175 million initial commitment to support the development of Allegiant Travel Co.'s Sunseeker Resorts Charlotte Harbor in southwest Florida. The initial commitment is part of an up to $1 billion long-term partnership between TPG Sixth Street and Las Vegas-based airline Allegiant to build the Sunseeker Resorts imprint, as well as to provide opportunities to expand the proposed resort and develop other properties or related ventures.

Sunseeker Resorts Charlotte Harbor is expected to offer an estimated 510 hotel rooms, 189 extended-stay units, meeting and conference space, restaurants, bars, and retail outlets.

* Chestlen Development obtained $180 million of refinancing for its dual-branded W+ Element Hotel in Philadelphia, Commercial Observer reported, citing Ben Silver, the head of global real estate debt at lender Barings.

Operated by Marriott International Inc., the 51-story, 504,581-square-foot property at 1441 Chestnut St. is slated to open in October. The W Hotel and the Element by Westin components will feature 295 rooms and 460 rooms, respectively. The floating-rate loan refinances $160 million in construction debt on the property from 2015, the report added.

* Novant Health Inc. paid about $21 million for the Hall Family Farm site in Charlotte, N.C., where it plans to build a $154 million hospital, the Charlotte Business Journal reported, citing Mecklenburg County real estate records.

If approved, the 161,000-square-foot Ballantyne Medical Center will open in 2023, with 36 beds, two general operating rooms, another operating room for C-sections and an emergency department.

* JEL Land Development LLC lodged a proposal to build a 364,347-square-foot mixed-use project in Orlando, Fla., which is expected to cost about $90.2 million as per industry standards, the Orlando Business Journal reported. Citing Orange County records, the paper added that the development will comprise industrial space and 350 apartments on vacant land south of Alafaya Trail and Innovation Way.

* Diversified real estate investment trust iStar Inc. funded its purchase of the 430,000-square-foot Newport Office Center IV in Jersey City, N.J., in February with $63.5 million financing from Bank of America, Commercial Observer reported, citing rating agency documents released March 18.

The REIT paid $96.4 million for the office building at 570 Washington Ave., while its ground-lessor affiliate, Safehold Inc., spent $68.4 million on the fee simple interest of the underlying land.

* Cincinnati-based supermarket giant The Kroger Co. and U.K.-based online-only grocer Ocado Solutions are close to signing a deal to establish an over $55 million, 335,000-square-foot e-commerce warehouse at the Groveland Logistics Center in Groveland, Fla., the Orlando Business Journal reported, citing unnamed sources.

* The North Miami City Council gave Trise Development consent to build a $50 million mixed-use senior apartment complex called Residences at NoMi in North Miami, Fla., The Real Deal reported. The 175-unit project will be developed on a 1.95-acre site at 950 N.E. 124th St. and feature three apartment buildings with seven, three and six stories, respectively.

After the bell

* The newly introduced opportunity zone fund market is starting to gain traction among property investors in the U.S., with such funds identified as an "emerging trend" in the real estate sector, according to the latest data from Preqin.

* A fund managed by alternative asset management firm Harbert Management Corp. called on Bluerock Residential Growth REIT Inc. to launch a review of strategic alternatives, including a potential sale of the multifamily real estate investment trust.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng rose 0.19% to 29,466.28, while the Nikkei 225 fell 0.08% to 21,566.85.

In Europe, around midday, the FTSE 100 climbed 0.42% to 7,329.76, and the Euronext 100 lifted 0.66% to 1,055.98.

On the macro front

The Redbook Index for retail sales and the factory orders report are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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REIT Replay: REIT stocks rise alongside broader market during week of March 15: All SNL REIT property sector indexes recorded share-price increases for the week, with the industrial and healthcare indexes leading the way, both up more than 2%.

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