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Chinese developer finds buyer for unfinished Oceanwide Plaza project
Firm needs more than $1.2B to wrap up construction in Downtown LA
Oceanwide may soon be free of its $2 billion unfinished project on the Downtown L.A. skyline.
The Beijing-based developer has signed a letter of intent to sell Oceanwide Plaza to a “potential buyer,” Oceanwide disclosed in filings with both the Shenzhen Stock Exchange and the Hong Kong Stock Exchange on Friday.
The potential buyer was not disclosed and the firm did not immediately respond to a request for comment.
A source familiar with the 2.4 million-square-foot project previously told TRD that U.S. developers including Brookfield Asset Management and CIM Group had looked to buy the L.A. project, but couldn’t pencil it out because of rising construction costs.
The structures of the project are completed, though the interiors are sitting about 60 percent finished. The project site is bounded by Figueroa, Flower, 11th and 12th streets near Downtown Los Angeles. When complete, Oceanwide Plaza would feature 504 condominiums, a 184-room Park Hyatt hotel and 150,000 square feet of shops and restaurants.
Oceanwide is still hashing out details of the purchase agreement, the firm disclosed. Any proceeds from the sale will go towards repaying various lenders and to resolve default, along with repaying debt on commercial properties in Shanghai.
In addition to the letter of intent — which is not exclusive and not legally binding — the firm has been “exploring” other ways to salvage the project, including forming a joint venture.
Oceanwide has previously disclosed it would need more than $1.2 billion to finish construction and has already spent more than $1.1 billion on the project.
Oceanwide Plaza is the firm’s only asset in the U.S., after the Chinese developer lost control of its San Francisco project and a site where it planned to build a supertall tower in New York City. In both cases, the firm defaulted on loans connected to the properties.
The firm is also in deals to sell land it owns in Hawaii, though no sale has yet been completed, according to the Friday filing.
Oceanwide is not the only Chinese developer facing financial issues in the U.S. Last month, Greenland, a developer based in Shanghai, sold its 59-story Thea at Metropolis tower in Downtown L.A. for $540 million — a record for the city, but a $200 million loss for the firm.