$290M Chinese investment revives plans for $1B Gehry-designed Los Angeles complex
- A $290 million investment from a state-owned Chinese company has re-energized a long-planned, Frank Gehry-designed, $1 billion mixed-use development in downtown Los Angeles, according to The Los Angeles Times.
- Construction on the Grand Avenue Project, spearheaded by New York City developer Related Cos., is expected to begin next year and will feature both for-rent and for-sale residential units, a hotel, retail and restaurants.
- With the investment from CCCG Overseas Real Estate, developers have raised more than $400 million in total, putting the project in a better position to secure financing to fund the remaining costs.
China has become an increasingly important player in U.S. development, particularly when it comes to high-profile projects in major metros like Los Angeles and New York.
In August, Bloomberg reported that China-backed SMI USA had invested $300 million in the $3 billion Central Park Tower project in Manhattan in exchange for 30% of development fees and a 4.5% annual return in the form of interest payments. However, conditions of the Chinese loan require that project leader Extell Development secure a construction loan. In December, Extell was able to refinance a $235 million land loan, according to The Real Deal, giving it more time to focus on obtaining construction financing.
In Los Angeles, Chinese company Oceanwide Holdings is giving the city another downtown $1 billion development, the mixed-use Oceanwide Plaza. Hyatt Hotels announced in October that it would place a luxury Park Hyatt hotel there. The complex, which is scheduled to open in 2019, will also include a 504-unit residential component and a shopping center.
Nevertheless, Chinese investor interest is not limited to the coasts, as Chicago's $1 billion Vista Tower drew significant Chinese investment. And at the University of Texas at Austin, real estate private equity fund management company Grand China Fund invested in a $60 million, 17-story student housing project. The company has invested in more than 22 U.S. residential projects nationwide.
Follow Kim Slowey on Twitter