Oceanwide Plaza Sale Likely to Close by End of Year

The broker on the bankrupt, half-built Oceanwide Plaza in the middle of Downtown Los Angeles says the property has drawn two viable bidders in coming months, The Real Deal has learned.

That’s down from a list of 17 interested parties last year, when a managed bid process commenced to sell Oceanwide Holdings’ 1101 South Flower Street project, according to Colliers’ Mark Tarczynski, whose team is marketing the property along with Hilco Real Estate.

The list narrowed as most of the would-be buyers “at the end of the day they couldn’t scare up the money,” Tarczynski said. “So now we’re like, ‘Hey, you want to talk, show us the money!’”

The price of admission includes $450 million to acquire the fully entitled site — which already has $1.2 billion spent on construction — and roughly $1 billion to complete it.

“We get a lot of interest, and it’s just finding a billion and a half dollars to complete the project is proving difficult,” the broker added.

Now however there are two serious “competing bidders,” he said. They are both real estate development companies, one from the U.S. and one from abroad, Tarczynski said, declining to provide any more details.

The broker said he anticipates closing the deal by the end of the year, though he previously said he was “hoping it will happen before the close of Q2.”

Construction on the 1.5-million-square-foot, graffiti-ridden project, which spans nearly a full city block across from the Los Angeles Convention Center and the Crypto.com arena, began in 2015 and progressed to two half-built towers in fits and starts before landing in bankruptcy due to financial issues, and claims of unpaid work. Everything has been on hold at the site since January 2019, according to the offering memorandum, with the project facing foreclosure in 2023 and filing for Chapter 11 bankruptcy the following year.

“I’ll tell you why the project lost its funding,” Tarczynski said. “It’s because China took a different approach to managing its money, its currency, and midstream in the construction, they shut the window on currency exchange, the one with the dollar. So it became increasingly hard to pull money out of China.”

Oceanwide owes about $400 million to creditors, according to court filings, including $180 million to EB-5 visa investors, $175 million to contractors led by Lendlease and $18 million to pay off county taxes, TRD previously reported.

The fully entitled mixed-use project in Downtown Los Angeles includes a 49-story Park Hyatt hotel with 32 residential condominium levels, multifamily and retail components across three mixed-use towers, plus a fourth, three-level retail building, according to the offering memorandum. The complex was designed by CallisonRTKL, now operating as Arcadis.

All in, the project will have 504 residential units, 183 hotel rooms, roughly 160,000 square feet of retail space, 1,412 parking spaces and 57,522-square-foot prominent electronic display.

“You have a project that’s already $1.2 billion built and it’s apartments and condos and hotel and retail and you’re getting it for a huge bargain — picking it up for $450 million,” he said. “And your entitlements are rock solid in place, ready to go.”