Oceanwide Seeks Financing Options For LA Project, Expected To Cost At Least $900M To Complete
Beleaguered Chinese developer Oceanwide Holdings has revealed updated financial details for its long-paused project in Downtown Los Angeles, which is proving to be much pricier than prior estimates.
The company has invested nearly $1.2B in Oceanwide Plaza since construction kicked off in late 2014 and would need to pay almost that same amount again to finish the project.
The company is estimating it will take at least $900M to complete the project, slated to include three high-rise towers with a residential and hotel component, as well as ground-floor retail. That milestone could occur by 2023, according to an interim 2021 financial report from Oceanwide. A U.S. representative for Oceanwide Plaza didn't immediately respond to a request for comment.
Oceanwide originally estimated the project would cost $900M in total and would be completed in 2018.
Construction on the roughly 1.5M SF development paused in early 2019; a few months later, Oceanwide announced that work had officially restarted. Oceanwide’s report maintains that the project’s main buildings have been complete since 2018, but it also notes their interiors and mechanical systems remain unfinished. Though the towers are built and their exteriors appear largely complete, passersby can stare into the skeleton of the podium, meant to hold retail space and amenities for residents of the hundreds of condos planned at the project.
Lendlease, the general contractor, confirmed to Bisnow that it had left the project but declined to comment further. An update to Oceanwide investors indicates the contractor was no longer working on the project as of June 30, 2021.
The 2021 report reveals Oceanwide sought $900M in financing to complete the project, including construction costs and paying off project debts such as mechanics liens, as well as costs incurred as a result of those liens. In September 2020, Oceanwide was in the first stages of securing the loan, but that lender ultimately decided not to move forward after undergoing the due diligence, the report states, and Oceanwide is still actively looking for funds to complete construction as well as a new general contractor.
Oceanwide is anticipating that the cost of resolving these lawsuits and legal issues relating to the development is $220.4M, not including legal fees. There are 32 contractors suing the project’s developers for money they say they are owed for work on the project, according to the report.
The Real Deal reported last week that the company planned to spend $2.3B in total on the project, noting that the company is expected to attempt to seek financing and deliver the project, rather than sell it, as the company has done elsewhere in the U.S.
In Manhattan, Oceanwide is looking to sell its development site for $190M less than the $390M it paid in 2016 to acquire it. More recently, creditors took over the 2M SF Oceanwide Center in San Francisco after the developer missed more than $300M of payments.
