Chinese developer Greenland USA has sold its 59-story apartment tower Thea for $504M, a figure the buyer says is a big savings over replacement costs for a similar property.

The price tag — though a record for an apartment building in LA — was far below the $695M that Greenland had hoped to fetch when it was shopping the property 18 months ago, The Wall Street Journal reported.

The buyer is private equity real estate firm Northland. It is Northland's first California purchase, according to a release from the company.

"In THEA, Northland secured an extraordinary opportunity to acquire the highest quality luxury apartment tower in the United States at a steeply discounted price," Northland CEO Matthew Gottesdiener said in a statement.

By Northland's count, the transaction values the apartments at $714K per unit and $688 per SF — "a 40-45% discount to today’s replacement costs," according to the firm.

Contributing factors to that discount include high interest rates and inflation, but also local issues, like California and Los Angeles rent regulations.

Thea was built as condos, but shortly before its opening in 2019, Greenland pivoted to apartments. The tower is 91% occupied, Northland said. The average rent is $4.5K per month, according to the WSJ.

Greenland put the apartment tower up for sale this summer, but has been looking to offload another property in its three-building Metropolis complex, the Hotel Indigo, for some time. Greenland asked $280M for the 350-key hotel in 2018, but it did not change hands. In New York, Greenland sold two Brooklyn apartment buildings for $315M this year.

Until very recently, Chinese developers invested heavily in Los Angeles. But about a year ago, some of the biggest developers in China began to have issues repaying their debt, which led to a cascade of similar issues for other companies in the development sector there that spilled over to their U.S. projects.

Several developers sold off projects or lost control of them. Over the summer, Greenland's parent company, Greenland Holdings Group, was placed on a default watchlist.