Oceanwide Towers Worth? In Question
Oceanwide Holdings has tried for years to sell its Downtown L.A. property. However, potential acquisition sources claim the costs of finishing the project are too great. It is irrelevant what the costs incurred have been, with estimates being in the $1-$1.2B range. The three-tower structure has been open to the elements for four years. The current value of the Oceanwide project is now being questions, given that the units now have graffiti-tainted windows and interest rates are higher. I was always advised that a property’s value is “determined by what someone is willing to pay for it.”
What we were promised by Oceanwide Development
According to the March 18, 2024, article in Bisnow titled, “Value of Oceanwide Plaza Disputed by Creditors Seeking Repayment,” a 2021 appraisal done by CBRE indicates that the “as-is” value of the project is estimated to be $313M. That same appraisal estimated that the value of the project once complete would be about $1.4B and that the cost to complete the project could be about $1.2B.
“A prospective buyer would be hard put to pay anything close to $200 million for the project in its “as is” condition, let alone the $370 million that the debtor says presently encumbers the property,” the document states.
In February 2024, a group of contractors claimed Oceanwide owes them a total of $4.3 million for unpaid work and has filed a petition for bankruptcy. The U.S. bankruptcy petition could force an asset sale. However, China Oceanwide, the parent company, has been delisted from the Shenzhen Stock Exchange, after its stock price dropped below the exchange’s threshold price of 1 RMB (about 14 cents in USD).
As of September 30, 2023, China Oceanwide reported that its liabilities were nearly double its assets, “indicating severe insolvency,” Yicai Global, a China-based business publication, wrote.
What Oceanwide gave us instead
Right now, the City of Los Angeles is most concerned with cleaning up graffiti sprayed across the 27 floors, which sit open to the elements and are visible from all around surrounding towers. With the public outcry of graffiti art and rogue paragliders, L.A. City has allocated $3.8 million to secure and clean up the site. It is unknown when the property will go into bankruptcy, or if the city will put it into receivership.
Thereafter, there will be an auction, which will determine the “real value.” Until then, we as residents continue to wait. The creditors, including L.A. City, will fight in the courts and hope to recoup some of their investment dollars. The clock is ticking...
By Marty Goldberg