Coronavirus forces another delay of Oceanwide Center sale in San Fran
Chinese developer’s attempt to unload partially-built mixed-use development for about $1B has been filled with obstacles
Blame coronavirus, again.
According to a March agreement between the developer and Beijing-based private equity firm Hony Capital, the deadline for the completion of due diligence was supposed to be June 30 — although the agreement did include provisions for an extension in the event of pandemic-related disruption.
The partially-built Oceanwide Center is set to include San Francisco’s second-tallest building after the nearby Salesforce Tower.
That deadline has now been extended to Sept. 30, China-based Oceanwide announced Tuesday. The parent company, China Oceanwide, will also be providing a loan of up to about $850 million to Oceanwide Holding to help it meet its “temporary capital requirements,” according to a separate disclosure.
In January, Oceanwide announced that it would be selling Oceanwide Center for $1 billion to SPF Capital International, which would represent a $276 million loss. The new deal with Hony entails a $700 million payment upon closing and up to $500 million three years later, depending on the development’s internal rate of return.
The sale of the San Francisco property is meant to “optimize the company’s industrial structure and balance sheet, improve the cash flow situation, reduce the scope of overseas operations and reduce overseas operational risk,” according to the disclosure.
While earlier delays to the Oceanwide Center sale were caused by the coronavirus outbreak within China, the situation in the U.S. now appears to be of greater concern. California’s coronavirus case count has skyrocketed in the past week, topping 200,000.
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