Greenland USA faces an uncertain future in California, but that hasn’t stopped the US arm of Chinese developer Greenland Group from bagging a $310 million construction loan to finish off the third phase of a $1 billion complex in downtown Los Angeles that was its maiden project in North America.
LA-based real estate investment firm Cottonwood Group and French lender Natixis arranged the senior construction loan facility, according to a statement by Cottonwood cited by the Los Angeles Business Journal this week. The 56-storey, 685-condo building is the third residential tower of Greenland’s multi-billion-dollar Metropolis project, which also includes the 350-room Hotel Indigo and 70,000 square feet (6,503 square metres) of retail space.
The financing comes after Greenland revealed earlier this year that it is seeking a buyer for the residential and hotel components of this third tower in the landmark mixed-use project.
Greenland Presses on with $450M Tower
As Greenland forges ahead with Tower 3, Metropolis’s second residential tower has begun to welcome residents. The 40-storey, 514-unit condo building opened to tenants at the start of August, after its completion in June. Prices start at $600,000 for studios and the upper $700,000s for one-bedroom units in the luxury high-rise.
Slated for completion in early 2019, the third tower spans a total of one million square feet and includes nearly 26,600 square feet of retail space, along with nearly half of Metropolis’s total supply of homes. Reports surfaced in March that Greenland had put the unfinished skyscraper up for sale for an undisclosed price — believed by one source to be $450 million — a month after the developer was said to be hawking the Hotel Indigo.
Greenland later confirmed that it was marketing both properties, according to an April newspaper report. “The potential for any future sale, Hotel Indigo or Condo Tower 3, would be decided based on the ebb and flow of the real estate market and the strength of the offer,” Greenland USA’s chief executive Hu Gang said at the time. A representative of Greenland USA did not respond to Mingtiandi’s inquiry by the time of publication.
Operated by InterContinental Hotels Group, the 18-storey Hotel Indigo officially opened in April of last year. Sources indicated earlier this year that Greenland was marketing the hotel with an asking price of $280 million, or $800,000 per room.
Metropolis is located along 8th and Francisco Streets in the South Park neighbourhood of downtown LA. The first residential tower, which also opened in 2017, offers 308 units across 38 stories.
Chinese Investors Pull Back from the US
Greenland bought up the Metropolis project in 2013, marking one of the earliest milestones for a years-long wave of Chinese investment in overseas real estate. That shopping spree has largely come to an end after mainland regulators slapped new controls on cross-border transactions last year. For the first time in a decade, Chinese firms became net sellers of US commercial real estate assets in the second quarter of 2018, according to data cited by The Wall Street Journal.
Although Greenland appears relatively unscathed by the regulatory crackdown, the developer has downsized its ambitions in California over the past year. The potential sale of the Metropolis properties has led to speculation that Greenland’s US operation may be suffering financial strains, after taking on a total of $8 billion in real estate projects on the east and west coasts.
In June, a Greenland-led Chinese consortium completed its exit from Kilroy Oyster Point, a waterfront office and biotech project in South San Francisco. The sprawling, 2.5 million square foot project was said to be worth $2 billion when the consortium picked up the site in August 2016. And last November, Greenland USA was reported to have bailed on negotiations for a 1.9 million square foot mixed-use development in North Hollywood.
Despite its west coast wobbles, Greenland USA is still going strong in New York City, where the company recently boosted its stake in the joint venture developing the $5 billion Pacific Park Brooklyn project from 70 to 95 percent.
Shanghai-based Greenland Group, chaired by Zhang Yuliang, was among 15 Chinese companies that received approval from the country’s economic regulator at the end of last month to issue foreign debt.