Lower Manhattan Site Purchased for $390 Million Being Shopped for Half-Off
JANUARY 11, 2022
BY ROBERT SIMKO
In a story first reported by the Real Deal, the financial distress plaguing property investment firm China Oceanwide Holdings (itself part of the wider contagion surrounding Shenzhen-based real estate firm, Evergrande) has led to a fire-sale price for a trophy Lower Manhattan parcel.
The company purchased 80 South Street (located between John Street and Maiden Lane) from the Howard Hughes Corporation in 2016 for $390 million. This transaction included a companion site, at 163 Front Street, that shares a mid-block border with 80 South Street. The combined parcel, plus air rights from nearby lots purchased and assembled by Howard Hughes, gave China Oceanwide the right to build a tower with a height of more than 1,400 feet, enclosing more than one million square feet of interior space.
Within months, China Oceanwide filed preliminary designs with the City, and obtained permission to begin demolishing the small legacy structure on the two lots. But the only substantive activity that followed consisted of the company taking out a $175 million loan against the vacant property.
By 2020, the COVID pandemic had begun to dampen the speculative value of urban properties, and China Oceanwide was starting to teeter beneath a mountain of debt. Last October, another trophy property slated for development by the firm, its Oceanwide Center in San Francisco, was seized by creditors.
A few days later, Oceanwide Holdings quietly began shopping 80 South Street to prospective buyers. Its asking price is reportedly $200 million—a discount of $190 million (or 48 percent) from the price it paid five years earlier.
The winner in this saga may turn out to be the Howard Hughes Corporation, which is also in the midst of several development projects at the nearby South Street Seaport. That company had purchased 80 South Street for $100 million in 2015, before unloading it to China Oceanwide, just over a year later, at almost four times that price.