Chinese Investor Bets $121M On Stalled Megaproject In Downtown LA
An affiliate of a Shanghai, China-based commercial real estate development investment firm has paid a reported $121M for a land parcel across the street from LA Live, Staples Center and the Convention Center in the South Park area of Downtown Los Angeles.
After more than four years in escrow and waiting for city entitlements, City Century, the Los Angeles arm of the Sheng-Long Group, has closed on the deal for a 3.3-acre site from California Primary Physicians.
The deal possibly paves the way for a multibillion-dollar mixed-use development called Olympia. City Century received the much-needed entitlements to move on with the project, according to the Los Angeles Times, which first reported on the deal.
Who might fill the new project remains to be seen. Major developments from Chinese development groups such as the Oceanwide Plaza, also across the street from LA Live, have shut down. A $1B 49-story mixed-use project that would have included a hotel and condos and retail ceased construction earlier this year because of lawsuits accusing the developer of millions of dollars of unpaid construction liens.
A representative for City Century did not respond to a request for comment.
"I think this is one of the most iconic and important development sites in downtown Los Angeles today," Tarczynski told Bisnow.
"You have the convention center and LA Live, and directly across the street, you're going to have the triple tower [Metropolis] development," he said. "Those people who end up living in the [Olympia] towers are going to have views of downtown in perpetuity because of the proximity to the freeway as well as provide more community involvements with the convention center and LA Live."
The deal comes as Chinese investments in commercial real estate nationwide are down, according RCA Analytics.
The RCA report released earlier this month found Chinese investors bought $1.41B in commercial real estate, which is down 75% year-over-year.
In Los Angeles, RCA reported Chinese investments in Los Angeles are down 57% from the fourth quarter of 2018 to the third quarter of this year.
Tarczynski said despite some uncertainty, he was sure the deal was going to close.
"It's common knowledge that the currency exchange has been shut down by China and it's more difficult to get money out of China these days but there are still Chinese firms still doing property development business around the world," Tarczynski said.
According to documents from the Los Angeles Planning Department, the Olympia project will be a 1.8M SF mixed-use residential and commercial project. The project sits directly across the street from the JW Marriott LA Live downtown hotel and a Regal Cinema.
The developer has proposed building either one of two projects on the 3.3-acre site on Olympic Boulevard and Georgia Street. The first option is building three high-rise towers totaling 1,300 residential units and up to 40K SF of restaurant and retail space. The second option is to build three high-rise buildings featuring a 1,000-room hotel and 879 residential units with 20K SF of retail space.
City Century Director of Development and Operations Arthur Chang told the LA Times that the Olympia will be “a world-class project."
“The Olympia project enjoys strong support from its downtown neighbors, including business organizations and unions. With the city having now granted approval of the project entitlements, we are looking forward to the next phase of work,” Chang told the LA Times.