Finance  ·  Distress

BH Properties Offers $10 Million Loan to ‘Graffiti Towers’ Owner

The debtor-in-possession financing would help China Oceanwide pay some of its obligations as it navigates Chapter 11 bankruptcy.


The abandoned and graffiti-laden Oceanwide Plaza development in Downtown Los Angeles has received a much-needed helping hand as its owners navigate bankruptcy.

L.A.-based BH Properties offered $10 million of debtor-in-possession financing to Beijing-based developer China Oceanwide Holdings Group to help pay for security, financial consultants, legal services and general liability insurance, according to The Real Deal, which first reported the news. Oceanwide has asked the bankruptcy court overseeing its Chapter 11 reorganization to approve the loan. 

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BH Properties offered the financing as a one-year revolving loan, wherein the developer would pay back at least 8.5 percent in interest, according to a court filing. If China Oceanwide defaults on the loan, however, it must pay back 18 percent interest. 

If rendered unable to accept the offer, the developer “would not have sufficient available sources of working capital and would be unable to administer its estate, pay its operating expenses or maintain its assets,” it said in the court filing. 

A spokesperson for BH Properties did not immediately respond to a request for comment. 

Oceanwide began construction on the mixed-use towers in 2014, though progress halted in 2019 as China’s real estate bubble lost steam just before the COVID-19 lockdowns began. The project, which takes up a whole city block on South Flower Street, has sat deserted since then, though it gained nationwide coverage earlier this year when graffiti artists tagged almost all of the 49 stories and daredevil base jumpers vaulted off the buildings for social media clout. 

A group of contractors in February filed a petition for involuntary bankruptcy on the project. Oceanwide owes its creditors and lenders some $400 million, as well as $175 million to construction contractors, $18 million in back taxes to L.A. County and repayment to the city for graffiti cleanup and beefed-up security. 

The plaza is also currently on the market, with the owners tapping Colliers and Hilco Real Estate to hawk the 1.5 million-square-foot property. The brokerage estimated the current market value of the development to be roughly $434 million, and that completion of the project would cost $865 million. 

Nick Trombola can be reached at