REAL ESTATE NEWS
Downtown Los Angeles has gained substantially by China citizens moving their money into L.A. real estate. That has been changing recently as China begins to go broke, enacting policies of capital controls preventing cash from leaving China for the U.S. China’s economic growth rate just hit a 30-year low as China’s exports are in free-fall. Because China cooks its books so thoroughly, the most accurate assessment of China is its foreign transactions. More accurate books are held by foreign nations that do business with China. Those books show that China’s actual growth is only 1/3 as much as the communist government claims. Even more accurate measurement of China is derived by looking at how it is paying its foreign bills. Last year, we learned that the China-based developers of Downtown’s huge OceanWide Plaza complex were late in paying builder Lendlease, which had to sue OceanWide in court. This week, the LA Loft Blog has learned that OceanWide plaza has been quietly put up for sale because OceanWide has been unable to raise the cash to complete the project. | VIDEO
Chinese conglomerate Oceanwide Holdings appears to be looking for a swift exit from some of the largest real estate markets in the U.S.
The Beijing developer is now trying to sell a portfolio of U.S. projects that includes Oceanwide Center in San Francisco and Oceanwide Plaza in Los Angeles. The report comes approximately eight months after it reportedly resumed construction on its once-stalled, $1B LA megadevelopment, which paused work amid financing issues. Australian multinational Lendlease is the general contractor for the LA project. It turned out that the resumed construction reports were not quite true. The project has been stalled for most of 2018 and 2019.
OceanWide Plaza New Construction Halts
Bloomberg had reported a while back that OceanWide Plaza construction halted as the developer attempted to get more financing: L.A.’s $1 Billion Trophy Tower Halted as China Pulls Back. Oceanwide Plaza has stuck in limbo as developer scurried to find a loan. The subcontractor pressed on with a lawsuit over unpaid work. #losangeles #realestate #market
Construction delays in Los Angeles are common and expected, but the delays are usually only days or weeks at a time, often stemming from the City of Los Angeles big bureaucracy and red tape. The L.A. Loft Blog pointed out that this delay was different. For the OceanWide Plaza and Metropolis projects, China’s slide into money woes was bound to lead to months, perhaps years of sluggish progress. #oceanwide
In an earlier L.A. Loft Blog post, we reported on the delays of the mammoth OceanWide Plaza condominium / hotel / shopping center project that appears to be more serious, and likely rooted in China’s overall economic downturn and resulting monetary problems for associated developers and builders.
Another new luxury tower is also affected: Further along in construction (with three of the four buildings already completed), the super-luxury Metropolis condo complex is also part of the same or similar lawsuit. The U.S. economy is part of the problem. Recently, the Metropolis developer has been holding the line, even reversing its planned price hikes, due to the cooling real estate market of Los Angeles. Recently, a man set several hallway wall paintings on fire in Metropolis, results moderate damage and evacuation of several floors. A suspect has been arrested, likely a homeless man who was possibly acting out of jealousy against the super luxury building. #metropolis #construction #delay #lawsuit
Los Angeles real estate news websites TheRealDeal.com and ConstructionDive.com report that Webcor sues Greenland for millions in alleged unpaid fees. In the suit, San Francisco-based Webcor says China-controlled company Greenland is in breach of contract for $9.8 million.
Major construction firm Webcor filed its claim in the form of a mechanic’s lien. If Webcor is successful, then OceanWide will not be able to complete and sell it’s units without Webcor getting paid first. Check out Vernon Martin’s article with more details about OceanWide Plaza’s troubles
It’s hard to get truthful news from the communist party of China. OceanWide’s pullout is the most accurate measurement of the actual nature of China’s true cash position. At the same time, Downtown Los Angeles has its own money issues. The median price for condos in Downtown LA has dropped by more than 4% over the last 12 months and the number active buyers dropped by 75%. While the DTLA real estate market downturn is not likely the root cause, the local market has certainly reduced the incentive for OceanWide developers to raise their risk exposure.
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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.
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