Multiple groups bid Thursday for the unfinished Oceanwide Plaza mixed-use development in Downtown Los Angeles, which was forced into bankruptcy in February of this year, Connect CRE has learned. An auction is scheduled for mid-September.
Industry sources familiar with the sale process told Connect that AEG Worldwide was rumored to be the front runner and had gone as far as retaining the project’s original architect. The development site is proximate to AEG’s LA Live and Crypto.com Arena, which have faced strong competition from the Hollywood Park mega-development in nearby Inglewood. However, AEG was not among the bidders who submitted offers on Thursday.
A key hurdle that any buyer would need to surmount is the question of financing: not so much to acquire the project, but rather to finish construction on it. The project has been appraised as-is at $434 million by Colliers as part of the Oceanwide Plaza bankruptcy proceedings. Completing the three-tower residential, retail and hotel complex could mean spending twice that amount.
In July, a mystery bidder surfaced who offered to serve as a stalking horse for the upcoming auction. The bidder offered to take control of the property for $500 million if no more compelling bids emerged, according to published reports. It’s not clear whether the stalking-horse bidder is still participating.
Work on the project at 1100-1198 S. Flower St. was halted in 2020 after the project’s developer, China Oceanwide, ran out of funding. The bankruptcy was initiated by creditors who hadn’t been paid for their work, including construction manager Lendlease.
In May, a Colliers team led by EVP Mark Tarczynski and a Hilco Real Estate team led by EVP Jeffrey Azuse were hired to spearhead the sale and potential completion of Oceanwide Plaza. The project, one of the largest stalled developments in the U.S., made headlines earlier this year when taggers covered much of it with graffiti.
Read More: BREAKING NEWS: Multiple Bids Submitted for DTLA’S Unfinished Oceanwide
