Leadlease Group has stopped work on its $1.2B, 47-story Hayes Point office and apartment development in San Francisco, the company said Monday.

The company paused the development earlier this year, Global CEO Tony Lombardo said during the company's most recent earnings call, due to the market's current conditions, particularly in San Francisco, where office leasing hasn't really recovered from the pandemic.

The 833K SF development, which is planned to include 234K SF of office space and 333 condo units, had a completion originally estimated for 2026.  It is Lendlease's biggest project in the Americas.

The Australian construction and investment giant has been buffeted by the turmoil in the real estate industry, especially the office sector. Last month, Lendlease cut 740 workers worldwide, or about 10% of its workforce, in a move expected to save the company at least $54.4M annually.

Last last year, Denis Hickey, who led the company's push in the United States over the last decade, resigned as the firm's global chief operating officer and CEO of its Americas division. He was succeeded by Claire Johnston as Americas CEO.

Property valuations for the company's portfolio dropped about 7%, down about $113M, with its office segment falling roughly 9% in value, Reuters reports.

The company reported a net after tax loss to $150M and a 7% year-over-year decline in core operating profit after tax for second quarter. To achieve its profit goal this year, the company's executives said it would need to sell off assets.

Lendlease stock dropped about 2.8% on Monday morning in the United States.