Photo: Paul Chinn / The Chronicle 2016 Photo: Foster + Partners Photo: Paul Chinn / The Chronicle Photo: Paul Chinn / The Chronicle 2019

Chinese developer Oceanwide Holdings suspended construction on a 605-foot tower in San Francisco’s Transbay district, one of the city’s largest projects, as it grapples with rising construction costs.

The Beijing company said Wednesday that work has stopped indefinitely on the shorter tower at its Oceanwide Center project. Oceanwide is studying ways to lower construction costs to resume work. The stalled tower at 512 Mission St. includes 156 condos and a Waldorf Astoria hotel.

Construction is continuing on a 910-foot office and condo tower that will be the city’s second-tallest, after Salesforce Tower. It is set to open in mid-2023 — about two years later than earlier estimates.

“In light of local market changes and economic uncertainties, Oceanwide has determined that a realignment of the work scope on the Oceanwide Center project is necessary to keep the project sustainable,” the company said in a statement.

Oceanwide Center is a high-profile example of how spiking costs are threatening the Bay Area’s building boom. A construction labor shortage and new U.S. tariffs on building materials have exacerbated already high costs. San Francisco is the world’s most expensive place to build, according to a survey by consulting firm Turner & Townsend. Delayed and canceled projects reduce the supply of housing and office space, potentially pushing up already record-high rents.

Oceanwide has been seeking additional financing for the project. Oceanwide declined to disclose the project’s total budget or how much it has invested to date. The Chronicle reported a budget estimate of $1.6 billion earlier this year.

Oceanwide bought the project site for $296 million in 2015. Construction began in late 2016.

At the same time, funding U.S. real estate projects became more difficult for Chinese companies after the Chinese government imposed capital restrictions on moving money out of the country, said Darlene Chiu Bryant, an executive director of GlobalSF, a nonprofit that works with international investors.

Chinese firms such as Greenland and Anbang have been forced to sell U.S. properties as a result, she said. Another Chinese developer, Z&L Properties, has had numerous project delays and lawsuits in San Francisco.

Oceanwide has never completed a project in San Francisco and made the atypical move of managing one of the largest developments in city history without a local partner. Other Chinese companies, such as Vanke, Gemdale and SRE Group, have partnered with American developers and appear to have more successful projects, said Bryant.

“I typically tell Chinese investors to work with a local partner,” she said.

It isn’t the first time Oceanwide has stopped work. In February, construction stopped on its Los Angeles project, Oceanwide Plaza. Work has since resumed.

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf