China Oceanwide Gets Time to Repay Debt on Manhattan Tower Site

John Gittelsohn, Bloomberg News

The New York City skyline seen from the Summit One Vanderbilt observation deck during the grand opening in New York, U.S., on Thursday, Oct. 21, 2021. The attraction takes visitors to the 93rd floor, high above iconic skyscrapers like the Empire State Building and the Chrysler Building, and features an immersive art installation called "Air," created by artist Kenzo Digital. , Bloomberg

(Bloomberg) -- China Oceanwide Holdings Ltd., the developer that’s struggled to salvage $3.5 billion of US real estate investments, reached a forbearance agreement with lenders on a site where it planned to build one of lower Manhattan’s tallest towers.

The deal marks a reversal from May, when Oceanwide said it had lost control of the property at 80 South St. after defaulting on a $165 million loan from DW Partners. Under the agreement, Oceanwide will make “extension payments” through October and has an option to extend the standstill for another month.

“The forbearance agreement will provide the company with additional time to repay the outstanding sums,” the developer’s Hong Kong affiliate said in a securities filing Friday.

Oceanwide invested $410 million in the project, and hasn’t broken ground for the skyscraper.

The company is among a group of Chinese real estate investors that ran into trouble overseas after Beijing restricted international capital flows in 2018. At least a dozen developers, including China Evergrande Group, faced default or delayed financial reporting as they battled massive debt.

This month, China’s housing ministry, finance ministry and the People’s Bank of China unveiled plans to support the domestic real estate sector, which has become a big drag on growth of the world’s second-largest economy.

QuickTake: How China’s Property Developers Got Into Such a Mess

Oceanwide has unsuccessfully tried to sell 80 South St., which it bought for $390 million in 2016 with plans for a 1,500-foot (457-meter) mixed-use tower near the Brooklyn Bridge. It has also failed so far to find a buyer for properties in Hawaii. Last year, it lost a San Francisco project to creditors after spending $1.3 billion on the stalled skyscraper. Construction at a downtown Los Angeles site, where the company invested $1.2 billion, has been suspended since 2019.

Representatives of DW Partners and Kalo Advisors, a Cayman Islands-based firm assigned to manage 80 South St. after the default, didn’t immediately respond to requests for comment.