April 2, 2020
Beijing-based Hony Capital agreed to purchase San Francisco’s Oceanwide Center in a $1.2-billion deal with Oceanwide Holdings. The new buyer emerged after SPF Group’s bid to buy the mixed-use development fell through reportedly tied to delays stemming from the coronavirus pandemic.
Hony Capital is reportedly paying $700 million at deal closing, and up to a maximum of $500 million three years later, based on the development achieving an internal rate of return exceeding 20%. The 910-foot office and condo tower and a 605-foot hotel tower at First and Mission streets were slated to be delivered next year. Hony Capital will assume Oceanwide Center’s budgeted operation, management and development costs.
Oceanwide Holdings’ Shenzhen Stock Exchange disclosure indicated that the framework for the agreement with a new buyer allowed both parties to commence negotiating a sale agreement “as soon as possible in good faith,” under a due diligence deadline of June 30. Oceanwide Holdings is seeking to optimize its overseas asset portfolio and reduce its overseas operating risks.
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