By Meghan Hall
The site of Oceanwide Center, a stalled project in San Francisco, but one that is projected to be one of the largest in the city, is expected to trade for $1 billion. According to a statement released by Oceanwide Holdings and a notice on the Shenzhen Stock Exchange, Oceanwide Holdings stated that it has approved a deal to sell to Beijing-based SPF Capital International Limited.
The transaction was first reported by the San Francisco Chronicle. JLL’s San Francisco Capital Markets group handled the transaction. The deal has not closed yet, but the property is currently under contract to sell.
Oceanwide Center began construction in 2016, and the plans call for a 910-foot tower, located at 50 First Street. The tower would be only slightly smaller than Salesforce Tower in height, making it the second tallest building in San Francisco. Another tower, rising 605 feet, would also be built. Together, the project includes one million square feet of office space, 265 residential units and a 169-key Waldorf Astoria Hotel.
Oceanwide Center is currently one of the largest office projects in the construction pipeline, and its sale will no doubt be one of the largest in San Francisco, and the Bay Area this year. A sale of this size in San Francisco itself has not happened in years; Boston Properties purchased the Embarcadero Center in 1998 for $1.22 billion, while 555 California Street sold for around $1 billion in 2005 to the Trump Organization and a number of Hong Kong investors.
Oceanwide Holdings originally purchased the project site five years ago from TMG Partners for $296 million, and the latest transaction is significant not only due to its size, but because the property is still under construction. Through the development of the First and Mission Street sites, Oceanwide had hoped to deepen it U.S. real estate presence, according to an initial press release on ChinaSF’s website. ChinaSF is a nonprofit part of the San Francisco Office of Economic and Workforce Development, which strives to connect Chinese companies looking to invest in San Francisco to local organizations.
Originally, completion was slated for 2023. However, the project’s construction has been largely beleaguered and Oceanwide announced in October it was stopping development, siting changing local market conditions and economic uncertainty. In November, the San Francisco Business Times reported that Oceanwide intended to sell the project, as well as another Los Angeles-based project site.
Initial budget estimates for the project were around $1.6 billion; however, The Chronicle reported that Oceanwide Holdings has invested $900 million in the project, and an additional $1 billion may be needed to deliver the development to the market.