search

The Real Deal Logo

Trending

Tides’ original investors may be wiped out by preferred equity dealTides’ original investors may be wiped out by preferred equity dealFort Lauderdale crane collapse victim seeks over $50M in damagesFort Lauderdale crane collapse victim seeks over $50M in damagesGlossier founder is buyer of $22M Brooklyn townhouseGlossier founder is buyer of $22M Brooklyn townhouseBillionaire hedge funder Larry Robbins makes South Florida moveBillionaire hedge funder Larry Robbins makes South Florida move
Commercial
Los Angeles

Oceanwide defaults on loan tied to unfinished LA megaproject

Beijing developer of Oceanwide Plaza “failed to complete construction” and owes $157M

Oceanwide's Liu Guosheng with the unfinished Oceanwide Plaza project
Oceanwide's Liu Guosheng with the unfinished Oceanwide Plaza project (Oceanwide Holdings, Google Maps, Getty)
By
Jun 5, 2023, 5:02 PM

China Oceanwide Holdings, the Beijing-based developer behind Oceanwide Plaza, one of the largest unfinished projects in Downtown L.A., has defaulted on an EB-5 loan tied to the development, The Real Deal has learned. 

The company owed $157.4 million to a group of EB-5 lenders as of January, according to a notice of default filed with L.A. County. A sale of Oceanwide Plaza can be scheduled after Aug. 8, according to the notice. 

Oceanwide Plaza, which is the only U.S. asset Oceanwide has left, has sat unfinished since 2019. In filings with the Hong Kong Stock Exchange, the firm said it would need more than $1.2 billion to finish construction, in addition to the $1.1 billion it has already spent. 

Across two towers, Oceanwide had planned to build a Park Hyatt hotel and 500 condominiums. 

Oceanwide has “failed to complete construction of the project in accordance with the loan agreement,” and failed to obtain a senior construction loan, according to the notice. 

Sign Up for the undefined Newsletter

The firm has also allowed mechanic’s liens to be filed against the project — violating the loan agreement — and failed to keep all risk insurance on the development. 

The EB-5 investors — together with a limited partnership named L.A. Downtown Investment — also said Oceanwide has failed to pay at least $11.8 million in interest payments and $56 million in principal. 

The EB-5 group recorded a loan with L.A. County for $325 million in 2015. However, in court records, contractors for Oceanwide have claimed the EB-5 lenders were only able to raise $138 million for the project. 

In February, an L.A. Superior Court judge ruled that the EB-5 lenders held a more senior position in the debt stack than unpaid contractors, meaning the lenders would get paid out first in the event of a default.

Oceanwide has also disclosed that it has signed a letter of intent to sell Oceanwide Plaza to a “potential buyer,” but has not provided further details.

Read more

Companies and People
China Oceanwide
Tags
BreakingBreaking NewsDefaultDevelopmentEB-5Oceanwidereal estate and financing