Chicago is runner-up for very grim mortgage award, hotel market chugs along: Daily digest

A daily round up of Chicago real estate news, deals and more for September 25, 2019.

TRD CHICAGO /
Sep.September 25, 2019 10:00 AM

Every day, The Real Deal rounds up Chicago’s biggest real estate news, from breaking news and scoops to announcements and deals. We update this page throughout the day, starting at 10 a.m. Please send any tips or deals to [email protected]

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At the end of the second quarter, about 8 percent of Chicago-area homeowners had a mortgage with negative equity. That’s over twice the national rate, according to CoreLogic. Only Miami had a higher rate, a 9.45 percent. [Crain’s]

The Chicago hotel market has remained strong, and now one local investor has scored a refinance on two properties in the South Loop. SB Yen Management Group secured a $147 million loan on the 172-key Best Western Grant Park Hotel at 1100 South Michigan Avenue, and the 233-key Homewood Suites by Hilton Chicago at 1101 South Wabash Avenue, records show. [TRD] 

Adam Neumann is out. Now what? WeWork is in talks with JPMorgan Chase and Goldman Sachs for a new $3 billion loan, contingent on raising significant equity. The office-space company is also looking at closing side businesses, such as WeGrow, and laying off thousands of employees. [Bloomberg]

Activist investor is taking aim at embattled mall owner. Michael Ashner, who has a track record of restructuring debt and forcing property companies to sell assets, purchased 5.97 percent of CBL Properties last month, taking 10.35 million shares at prices ranging from $.80 to $1.16. CBL’s stock has plummeted 70 percent in the past year. [WSJ]

An impeachment inquiry against President Trump begins. While the House will focus on his discussions with the Ukrainian president, Trump and his associates have a history of dealings in the country, TRD found. [TRD]

The city has given the green light to marijuana dispensary company Cresco Labs’ move to a newer and larger facility. Cresco Labs will move just a half mile down the right to a new facility in Wrigleyville. Mayor Lori Lightfoot has come out against dispensaries in the downtown. [Chicago Tribune]

Crews demolished the Puerto Rican community center in Humbolt Park on Tuesday. In its place, the Hispanic Housing Development Corporation will build an affordable housing complex for seniors and families. It has not committed to adding a new community center. [Block Club Chicago]

About 30 EB-5 investors stormed into their local agent’s office in Beijing, demanding they be repaid over a stalled 62-story Chicago development project. Symmetry Property Development says they’re not owed anything since they are actively pursuing the project in River North. [TRD]

The owner of a CBD shop in the Loop is suing its landlord for breach of contract. CBD Kratom at 28 E. Randolph Street alleges it was prohibited from using its logo — which features a hemp leaf — on a sign above its new store. The suit claims the owners and operators of the building refused to approve the sign “and specifically made references to the signage as promoting marijuana usage.” The plaintiffs are seeking $250,000 from the defendants, named as Wabash Randolph Garage, 4 Garages and General Parking Corp. [Chicago Tribune]

 

The kids are leaving. An analysis of population migration from the Tribune found that Hancock County has lost 47 people per 1,000 residents in 2017, while Cook County had just 26 people per 1,000 residents leaving. Overall, when people leave they tend to be young; the largest group fleeing the state was in their 20s, and were white non-Hispanic making $50,000 a year or less. Residents often left for Indiana. [Chicago Tribune]

 

Sterling Bay is making progress on the environmental cleanup at Lincoln Yards. The developer has remediated 25,000 tons of polluted soil, 200,000 gallons of contaminated water, recycled 30,000 tons of concrete, and removed 30 underground storage tanks containing petroleum products. [Curbed]

 

Federal agents raided the Springfield and Cicero offices of Illinois Sen. Martin Sandoval. The Democrat’s Southwest Side home was also searched. A source told the Tribune investigators are looking into allegations the Senate Transportation Committee chairman used his official position to steer business to at least one company in exchange for kickbacks. No criminal charges have yet been filed. [Chicago Tribune]

 

Maybe Chicago can weather the e-commerce storm. An analysis by MetLife Investment Management found that e-commerce spending is slowing in markets such as Chicago, Baltimore and Salt Lake City. Landlords are still in a tough spot, though: the retail vacancy rate is 11 percent and its retail stock score poorest among 30 large markets between 2013 to 2018. [Crain’s]

 

Adam Neumann is out. Now what? WeWork is in talks with JPMorgan Chase and Goldman Sachs for a new $3 billion loan, contingent on raising significant equity. The office-space company is also looking at closing side businesses, such as WeGrow, and laying off thousands of employees. [Bloomberg]

 

Activist investor is taking aim at embattled mall owner. Michael Ashner, who has a track record of restructuring debt and forcing property companies to sell assets, purchased 5.97 percent of CBL Properties last month, taking 10.35 million shares at prices ranging from $.80 to $1.16. CBL’s stock has plummeted 70 percent in the past year. [WSJ]

 

An impeachment inquiry against President Trump begins. While the House will focus on his discussions with the Ukrainian president, Trump and his associates have a history of dealings in the country, TRD found. [TRD]


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