Chinese developer Oceanwide takes $276M loss on megaproject; CEO is out

Work on Oceanwide Center in San Francisco has been stalled for months

Fifth Third Bank's Greg D. Carmichael
A rendering of the project

Embattled Chinese developer Oceanwide Holdings has sold its flagship San Francisco development for $1 billion, taking a substantial loss on what was slated to be the city’s second-tallest tower. Oceanwide also announced that its CEO, Han Xiaosheng, was stepping down.

Oceanwide is the same firm behind the Downtown Los Angeles megaproject Oceanwide Plaza, a $1 billion-plus condominium, hotel and retail project which has been stalled for about a year, as well as 80 South Street in Lower Manhattan, whose status is also uncertain.

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Donald Trump, Xi Jinping and (center) Oceanwide CEO Thomas Feng pictured with a photo of Oceanwide Plaza under construction and a rendering of the project (Credit: Getty Images, Google Maps)
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The buyer for the San Francisco site was an entity associated with SPF Capital International Ltd., Oceanwide announced in a regulatory filing on the Shenzhen stock exchange. That entity is associated with Beijing-based asset manager SPF Group. Oceanwide said it expects to take a $276 million loss on the project, or a haircut of about 28 percent.

The San Francisco Chronicle first reported the filing related to the sale. Xiaosheng will remain chairman of the firm and his deputy, Wu Chen, will take over as chief executive, according to the filing about the leadership changes.

Oceanwide was one of several firms from China that bet big on the U.S. development market from 2015 onwards, spending billions on large-scale projects in L.A., New York and beyond. However, after the Chinese government tightened capital controls beginning in late 2016, many of these efforts have fizzled out or been mired in uncertainty. Dalian Wanda Group, for example, sold a large Beverly Hills site to Beny Alagem, while Anbang Insurance Group is looking to sell an office condo on Manhattan’s Fifth Avenue for a substantial loss.

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