Oceanwide Center sale delayed once more
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The pending sale of Oceanwide Center, a troubled 2 million-square-foot mixed-use project under construction in downtown San Francisco, has been delayed once more, reportedly because of the Covid-19 pandemic.
The developer, Oceanwide Holdings, announced Tuesday it has agreed to give Hony Capital, a Beijing private equity firm that has the site under contract, until Sept. 30 to close the deal, according to The Real Deal, which attributed the delay to the pandemic.
Hony Capital agreed to pay $1.2 billion for the project in March; it had 15 days past the original June 30 due diligence deadline to close the deal. The Real Deal said the contract contained provisions for additional Covid-related extensions.
Beijing-based Oceanwide has accepted an $850 million loan from its publicly traded parent company, China Oceanwide, to “develop and meet the company's temporary capital needs,” according to a disclosure filed by the company Tuesday.
The project consists of a 910-foot office and condo tower at 50 First St. and a 600-foot hotel and residential tower at 512 Mission St. The company halted construction on the shorter tower, slated to be a Waldorf Astoria, last fall, citing financial uncertainty.
A groundbreaking ceremony was held in late 2016, but the $1.6 billion project has yet to entirely reach grade. Click here to read a May cover story from our print edition about the embattled project.
After halting construction on the hotel portion, Oceanwide Holdings listed the development — slated to feature San Francisco's second-tallest skyscraper — for sale last November.
In January, Oceanwide announced an agreement to sell the project to SPF Capital International Limited for about $1 billion, a deal that would have left Oceanwide Holdings with a $276 million loss. SPF had inquired about converting the hotel space in the shorter tower to additional residential units and residential units in the larger tower to office space. The company ultimately pulled out of the deal by March 31 as the pandemic was sweeping the world. SPF was reportedly $200 million shy of closing.
Under the terms of its new agreement with Hony Capital, Oceanwide Holdings is set to receive $700 million upon closing and up to a maximum of $500 million three years later, if the internal rate of return on the development exceeds 20%.
Requests for comment made to Hony Capital and Oceanwide Holdings were not immediately returned on Tuesday.
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