China Oceanwide’s LA ‘Graffiti Project’ Up for Sale After Creditors Sue Developer

Two months after making global headlines for being one of the world’s largest graffiti takeovers, a downtown Los Angeles project by China Oceanwide Holdings has been put on the market after creditors and stiffed contractors sued the troubled builder earlier this year to force a sale.

In an exercise subject to bankruptcy court approval, agents Colliers and Hilco Real Estate are marketing the 1.5 million square foot (139,355 square metre) condo, hotel and retail development, which has been valued at $1.2 billion.

Oceanwide Plaza stands opposite Crypto.com Arena (formerly Staples Center) and comprises three towers designed to house a Park Hyatt hotel, serviced residences and luxury condos, plus retail space and private parks.

“We are determined to run a disciplined and orderly process to identify the right developer to finish the project in time for the 2028 Summer Olympics,” Colliers executive vice president Mark Tarczynski said Tuesday in a release.

Overseas Empire Unravels

Oceanwide launched Oceanwide Plaza in 2014 but halted construction in early 2019 when the Beijing-based company signalled a need to recapitalise the project. Since that time, the cash-strapped developer formerly chaired by billionaire Lu Zhiqiang has moved to sell off its stalled US property empire piece by piece.

In August 2022, Oceanwide entered into a tentative agreement with a potential buyer for Oceanwide Plaza, but no deal eventuated. In December of that year, the company revealed that it had failed for a third time to sell its halted $1.6 billion San Francisco megaproject, Oceanwide Center.

Towards the end of 2022, Oceanwide announced that it had completed the sale of a residential site on Oahu to a US company for $95 million. The site was one of three parcels on the Hawaiian island that were bought by the company in 2016, with none of them having progressed past the design phase.

In January 2023, lenders took control of Oceanwide’s $410 million 80 South Street project, a 457 metre (1,499 foot) tower near the Brooklyn Bridge in Manhattan, after the company defaulted on a $165 million loan backed by the property.

Lendlease Lawsuit

Oceanwide defaulted on a loan tied to the Los Angeles project in mid-2023, and February of this year saw a lawsuit filed against the company by Australia’s Lendlease and four other contractors claiming non-payment for their work on Oceanwide Plaza.

Oceanwide owes almost $400 million to creditors, including $175 million to contractors, Bloomberg reported Tuesday, citing remarks by a lawyer representing the project company.

“I think this is a good opportunity for this building to come back alive, and to show how a bankruptcy case can fix a lot of problems,” Sharon Weiss told the news agency.