Chinese developer Oceanwide buying property in downtown L.A.
BEIJING — Chinese property developer Oceanwide Real Estate Group said Friday that it would make its first foray into the U.S. It will spend up to $200 million to buy a sprawling parking lot in downtown Los Angeles across from Staples Center and the L.A. Live entertainment complex and develop a five-star hotel, apartments and retail space.
The 4.6-acre site at the southeast corner of 11th and Figueroa streets has already been approved by the city for a high-end, mixed-use complex called Fig Central.
The project is “a very important step for our company to ‘go abroad’ and push forward the internationalization of our company,” Oceanwide said in a notice to the Shenzhen stock exchange, where the company is listed.
Experts said the purchase reflects the growing interest of Chinese investors in Southern California real estate and in property throughout the U.S.
Oceanwide purchased the downtown L.A. property from the New York-based Moinian Group, which bought the property from Staples Center owner Anschutz Entertainment Group about seven years ago when L.A. Live was under construction. Moinian paid $80 million for the lot. Company officials could not be reached for comment.
Before deciding to sell the property, Moinian got city approval to build two residential towers including condominium lofts, penthouses and live-work units. A grocery store, health club, retail space and restaurants were slated to take up about 250,000 square feet at street level. But nothing was built.
A spokesman for Oceanwide in Beijing, Wang Guolin, said in a phone interview that the project would be the company’s first U.S. project. He also said Oceanwide had recently established an American subsidiary, Tohigh Construction, as part of its plans for the downtown L.A. development.
Details on the purchase are still being finalized, he said, and he could not comment on when construction might start.
Promotional materials for the property advertised it as being in near “shovel-ready” condition, with groundbreaking possible in four to six months after a sale and approvals in place for at least 1,200 residential units, 500 to 700 hotel rooms and nearly 2,000 parking spaces.
In June, broker David Hasbrouck of Cushman & Wakefield, who is representing Moinian in the sale, told The Times that the parcel had attracted interest from Asian, Middle Eastern and U.S. developers. He could not be reached for comment.
But others noted the recent Chinese developer interest in Southern California.
Los Angeles commercial real estate broker Laurie Lustig-Bower of CBRE Group Inc., who focuses on selling property for apartment and condominium communities as well as already constructed apartment buildings in the Southern California area, said she’s seen growing interest from Chinese investors looking to buy development sites in the Southland.
“I’ve definitely seen a trend over the past years of a lot more activity from China into the Los Angeles area than before,” she said.
Lustig-Bower said she’s been part of the effort to sell a 6.3-acre parcel of land in downtown Los Angeles near L.A. Live and Staples Center known as the Metropolis, and added that her firm has seen offers from around the world, including multiple bids out of China.
The interest comes for both development sites and already constructed buildings, she said.
In January, Lustig-Bower said, she’ll be hosting investors from Hong Kong who are looking to make investments for already constructed sites in the $25-million to $50-million range. And she is in the process of working out a purchase agreement with a Chinese investor for a “high-profile” development site in West L.A.
Some Chinese developers are looking to branch out to other types of investment, Lustig-Bower said. Within the last three weeks she was contacted by one investor seeking to buy land where a residential community of 200 homes could be built.
A website for the Fig Central project, figcentral.la, includes plans for two towers. The north tower plan has 51 stories, rises 575 feet and includes hotel and residential space. The hotel would have 500 rooms. The second tower is designed to have 37 stories devoted to residential space.
Oceanwide has built major residential and commercial developments in cities including Beijing, Shanghai and Wuhan. The founder and chairman of Oceanwide, Lu Zhiqiang, 62, was ranked No. 32 on Forbes’ 2013 China Rich List, with an estimated fortune of $3.2 billion. In addition to real estate, he has interests in China Minsheng Bank and computer maker Lenovo.
Tommy Yang in The Times’ Beijing bureau and staff writers Roger Vincent and James Barragan in Los Angeles contributed to this report.
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