Brokerage Colliers and Hilco Real Estate have been hired to lead the sale and potential completion of Oceanwide Plaza, the partially built mixed-use complex in downtown Los Angeles that got national attention as a symbol of the area's development struggles when its towers were hit by graffiti taggers.

Subject to bankruptcy court approval, the brokerages were selected by Oceanwide and court-appointed administrators to lead a sale that would lead to completion of the unfinished, three-tower project that ground to a halt in 2020 after China-based developer Oceanwide ran out of funding. The project is at 1100-1198 S. Flower St.

The complex made headlines earlier this year after overnight taggers painted up the length of the towers and their handiwork made newscasts and gained attention online. City officials had guards posted to prevent further vandalizing, but vivid spray paint remains.

Colliers Executive Vice President Mark Tarczynski said marketing for the project should be at least partially helped by its size and location in the nation’s second-largest city, not far from the home of the NBA’s Lakers.

Challenges would come less from the negative attention from the graffiti and more from the limited pool of buyers, who industry professionals have said may be large institutional investors with the necessary ties to capital and development resources. There are also wider development challenges facing all types of developers in the climate, including high interest rates.

“The potential buyer pool is going to be small, when you think of the resources that will need to be marshaled to bring this together,” Tarczynski, one of several Colliers and Hilco brokers tapped to market the project, told CoStar News in a phone interview. “But I am very confident that the right buyer is going to be found.”

He said brokers are assembling marketing materials and expect to issue a formal request for offers around July, with expectations to have the property under contract to a new buyer by October. Contingent on bankruptcy court approvals, a new owner could complete a purchase and resume work on the project by mid-2025.

“The price should be very advantageous for a buyer,” Tarczynski told CoStar News, noting Oceanwide had already spent about $1.2 billion to bring the project to its current two-thirds completion. The project was most recently appraised at about $434 million, according to Bloomberg. A list price hasn't been set yet.

Plans for the three-tower project include a 184-room hotel, 164 condo residences, 504 apartments and 161,000 feet of retail, with a 40,000 square foot event center. The project has also been entitled for more than 50,000 square feet of electronic signs. The original developers intended to make the project resemble New York’s Times Square and complement the nearby mixed-use LA Live complex that includes hotels and the Crypto.com Arena, formerly Staples Center.

The project’s construction financing delays lingered as downtown Los Angeles has faced continued challenges in its office market, with escalating vacancies and subleasings as companies downsize footprints and put space back on the market. Downtown Los Angeles also has among the nation’s largest populations of homeless people.

These are part of a longstanding backdrop facing many types of developers.

“Given the scale of the project, the negative press around Downtown Los Angeles, and the continued capital markets environment, there will likely be a limited number of interested buyers,” said Ryan Patap, senior director of market analytics for CoStar News in Los Angeles. “The recent tagging of the entire building is all too indicative of the challenges downtown Los Angeles has faced in recent years.”

In a Colliers statement, Tarczynski called Oceanwide “an important and iconic development” and said brokers are “determined to run a disciplined and orderly process to identify the right developer to finish the project in time for the 2028 Summer Olympics” taking place in Los Angeles.

Sale proceeds would go to Oceanwide’s creditors, including general contractor Lendlease, which filed the original petition for the involuntary Chapter 11 bankruptcy to prevent Oceanwide from selling off the property in foreclosure. Oceanwide officials did not immediately respond to a CoStar News request to comment. 

Pending court approvals, Oceanwide Plaza will be marketed for sale by a team that includes Mark Tarczynski, Nathan Fong, Adam Tischer and Andy Kazama of Colliers; and Jeffrey Azuse, Daniel Miggins and Jamie Cote of Hilco Real Estate.