Q&A: Big Ambitions at Oceanwide Plaza
Los Angeles Downtown News
By Eddie Kim
March 17, 2017
For years, the block of Figueroa Street across from Staples Center held nothing more than an expanse of parking lots. Today it’s a hotbed of construction as workers hammer away on the $1 billion project dubbed Oceanwide Plaza.
The complex will feature three towers with 504 luxury condominiums, a 184-room Park Hyatt hotel, and 166,000 square feet of retail space in an open-air galleria. It broke ground in March 2015 and is expected to debut in 2019.
It’s the first project in the United States for Beijing-based Oceanwide Holdings, a massive conglomerate that has a history of building transformative mixed-use complexes. In quick succession, the company has also snapped up land in San Francisco, Sonoma Valley, New York City and Hawaii.
Los Angeles Downtown News recently sat down with Oceanwide Plaza CEO and President Thomas Feng at the company’s local headquarters in the Financial District’s TCW Tower. His responses, translated by Oceanwide Plaza Marketing Director Stephanie Chang, have been edited for clarity.
Los Angeles Downtown News: Oceanwide Plaza is the company’s first project to break ground in the U.S. Why did you choose the Downtown Los Angeles market?
Thomas Feng: When looking at the real estate investment landscape in the U.S., we focused on cities that had a renaissance — a lot of growth and transformation. That’s why we’re developing in L.A. but also San Francisco and New York City. A lot is changing, but the overall growth we’re seeing in L.A. should last for 20, 30 years to come. Why Los Angeles first? We were indifferent at the beginning, but this property was the first to be ready.
Q: How is Oceanwide Plaza financed?
A: When we purchased the land for $174 million, it was our own funds. For construction, there are three segments: One is EB-5 money from international investors. We also have an entity in Hong Kong that does international financing for us, so we have loans but not through U.S. or other banks. And the last component is coming directly from Oceanwide Holdings.
Q: What differentiates Oceanwide Plaza from the other nearby projects rising such as Metropolis and Circa?
A: A project like ours has never really been built before in this market. The others are mixed-use too, but Metropolis, for instance, has a relatively small retail component. Mixed projects like this are far more common in China because the land opportunities are more limited there.
We do need to figure out how to differentiate ourselves to the public. We feel that the Park Hyatt is unique, as is the level of quality, the design and luxury of our units, and an audience of high-net-worth customers that are at a unique tipping point.
Q: If you’re aiming for that high-end market, how will it impact the retail strategy?
A: Knowing so many more people want to move here in general, what comes next? There’s FIG@7th, and [the Bloc], and L.A. Live, but that’s not enough. People want to shop, so we want to ensure a diverse package. With 166,000 square feet, Oceanwide Plaza is by far the largest retail opportunity in Downtown right now. That’s about 35-40 stores.
We did outreach to nearby residents before construction because we wanted to hear what our neighbors want and how we could help their home values. If we go after tenants that match how our condominiums are marketed, that would be only ultra-luxury shops. We’re not going for that. We want to look at the big picture for the neighborhood.
Q: There are concerns about an influx of international buyers, including some from China, who won’t live in their units. Are you addressing that?
A: We can’t force people to stay where they purchase, but we do not want too many absentee owners. We want people staying and maybe even working in the community. We spent a lot of money building the two-acre outdoor amenity deck — that open land is valuable. We want it used.
We don’t have studios, because we’re targeting people who want to expand their families and lifestyle here. The majority of our condominiums are two bedrooms, with square footage comparable to other projects’ three-bedrooms. That’s about wanting people to not compromise when they move Downtown. Even picking Park Hyatt, we knew it was a brand with a lot of loyalists who would return.
Q: Could we see more activity from Oceanwide in L.A?
A: We won’t be opposing any new opportunities in Los Angeles, but one of the concerns is the cost of construction is very high in California and going up. It was unexpected for us, so we may need to pause and analyze whether this makes sense.
For more information or to read the original Los Angeles Downtown News article, click here.