by admin on December 17, 2009
With the appropriate amount of fanfare, the mammoth project CityCenter finally opens. Project CityCenter has been certified as a green project, making it the largest green project in the state surpassing the Palazzo. CityCenter offers two luxury hotels with some fantastic room deals to entice visitors, like $109 a night with unlimited play and other goodies. MGM Mirage had literally bet the farm the on the project, along with their investment partners from Dubai. Locals and tourists have flooded the project and interviews on our local television stations have portrayed nothing but positive reactions so far.
by admin on November 26, 2009
In the midst of the worse condo market ever, project CityCenter managed to beat the odds and continue to race towards completion. Over the past 18 months, several high profile condominium and loft projects joined the ranks of the dream projects. CityCenter is set to open next month and the final preparations are being made. The project is GREEN, earning an impressive six GOLD LEED certifications, the highest rating of any building(s) in the state of Nevada. CityCenter condo owners will be eligible for increased tax and energy savings as a result.
Because of the condo market softening, CityCenter was forced to lower its prices. Consequently, brand new condominiums are still available for sale. If you are looking for a condo on the strip, there has never been a better time to buy.
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The Saga of CityCenter Continues
by admin on September 21, 2009
by admin on August 7, 2009
Earlier this year CityCenter was facing a revolt from its contract buyers demanding price reductions on their units. A small group of buyers went so far as to obtain an attorney to try to get out of their contracts because the contract price was no longer fair. Now, since when is anything in life fair? I hardly doubt that these same buyers would have been happy had prices gone in the other direction and CityCenter then demanded they pay more money for the units they had already agreed to buy at a set price. Of course since the market has fallen steeply, the units are now dramatically overpriced.
MGM Mirage chief executive agreed stating “There’s no debate that the market has fallen dramatically in pricing since we initially priced these units.”
However, I absolutely agree with the contract buyers that they should had have their prices reduced to current market value, but because it makes good business sense on several levels. The foremost reason being there isn’t a bank in the country that will finance them at the prices they were originally purchased at. Another reason is because of who the buyers are. Several high end buyers frequent the MGM Mirage properties and are on their special clients list.
MGM Mirage came to the same conclusion earlier this month and has agreed to work with these buyers and the banks to get the units closed. The company has also stated that they are working with their customers and banks to get clients into their contracted units. It seems that MGM Mirage has finally seen the writing on the wall. The project is scheduled to open by the end of the year.
by admin on July 26, 2009
Once upon a time property auctions were a rare bird in southern Nevada. Of course, so were foreclosures. So with the real estate market now a buyer’s market, property auctions have gained some popularity among lenders as a way to quickly reduce their inventory. The latest big auction will be for Newport Lofts.
Newport Lofts by Cherry Developments was seized by its lenders and the bank decided to try to sell the units themselves. A few other projects around the valley are doing the same thing, notably Streamline Tower located just a few blocks away in downtown Las Vegas and One Las Vegas located on the south side of Las Vegas Boulevard.
Newport Lofts is located in downtown Las Vegas at 300 Hoover street. There are 20 new lofts that will be auctioned off on August 29th at 3:00 pm. The auction company has taken a step forward and published the reserves for each unit (the least amount they will take to sell it, although the auctioneers stated the sellers have the option of taking a lesser amount). Reserves range from $90,000 for a studio up to $450,000 for a penthouse. Auction financing will be provided with rated for owner occupied units at 5.55% APR and 80% financing for vacation home buyers or investors at 5.693% APR Prime lending. The open house begins on July 31st thru August 28 from four to eight pm on Fridays, noon to four pm on Saturday and Sunday.
Auction Fine Print
You are required to buy a bidder’s packet by mail for $10 or an On-Site Inspections in order to bid on the property. During registration your must also [click to continue…]
Recently a lot of local and national press have been focused on a small group of buyers at CityCenter. Some early condo buyers are demanding significant price reductions….despite signing a contract. Now, I’m not taking sides. I had agreed to buy a property, sight unseen, years before it would be completed and then as it neared completion the market had dropped significantly, I wouldn’t be happy either.
Somehow, I don’t think the same buyers would have thought it was fair if the market had shot up and CityCenter demanded more money. As almost everyone in the country has found out of the last few years, there is no guarantee in the real estate market that the value will always go up. Mark Connot, a partner with Hutchinson & Steffen whose firm is representing a few CityCenter buyers had this to say:
It is simply not possible by any stretch of the imagination to close on the units at the contracted price.
I’m not a lawyer, but when you sign a contract it is binding…unless there are special circumstances. MGM Mirage has stated that they are not going to reduce prices for buyer in contract at this time. However, legal and morals aside, Mark is absolutely correct. These units will need to be appraised if the buyers are not paying cash. Given the current state of the market, [click to continue…]
by admin on June 23, 2009
It has been a very rocky road for Turnberry Associate’s latest project Fontainebleau. Earlier this year it was in an enviable position having secured 100% of its financing prior to construction. However, despite the best planning the project was forced to file Ch. 11 bankruptcy earlier this month. The project ran out of money after the final-stage lenders withheld $675 million in revolver financing in March, citing an unspecific breach of loan covenants. Fontainebleau denies breaching any loan covenants in the lawsuit. Construction on the project has slowed to a halt, with the majority of the workforce laid off.
However it is not all bad news for the future of the project. A short time ago the bankruptcy court approved several of Fontainebleau’s first-day motions, providing partial access to $201 million in cash as well as payment of back wages. Fontainebleau has also asked for an expedited hearing on the matter.
But that’s not all. An unnamed lender has stepped forward to provide enough financing to finish the project if the banks involved will unfreeze current loans. The bankruptcy judge Jay Cristol hearing the case is urging all parties involved to try to work a compromise.
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by admin on June 10, 2009
The courts have been kept quite busy since the real estate bubble burst. If you surf the web, it seems that everyone was predicting that the housing market crash. One of the things that people tend to forget is that there is no guarantee that any property you buy will go up in value.
Right now there is a condo developer being sued because the project failed. The developer, Terry Bean of Oregon bought an apartment complex with the intent of converting it into condos three years ago. At the time, he paid $35 million for it which would be right around the time the market peaked. Two Portland investors, Frank Dulcich and Richard Akerman claim that [click to continue…]
One thing is for certain, the courts have been kept busy by developers. In an interesting turn, the owners of Fontainebleau are accusing their lender, Deutsche Bank of trying to destroy their project in order to protect their own condo project.
Deutsche Bank, along with several other lenders were named in a lawsuit claiming that they violated financial obligations when they canceled an $800 million revolving credit facility needed to complete construction on the Fontainebleau resort.
Fontainebleau filed a suit last month, stating that they are not in default and accused the banks of trying to get out of their financial commitments (the loan was canceled on the grounds that the project had defaulted on unspecified loan requirements).
Deutsche Bank is also developing the Cosmopolitan resort on the strip after buying the property for a Billion dollars after it went into foreclosure. The amendment filed by the Fontainebleau alleges that Deutsche Bank is trying to minimize the competition with their project.
Meanwhile Irish based Harcourt Developments has filed a counter claim against Glen, Smith Glen Development, its principals and one of their spouses for fraud. Harcourt was an equity partner in the stalled Sullivan Square condo project. Harcourt is claiming that Glen, Smith Glen Development tried to induce them to fund construction of the project based on straw man condo sales.
Earlier this year, some of the original charges filed against Harcourt were dismissed. It seems that Sullivan Square will join the ranks of other Las Vegas dream projects.
Over the past 18 months, several high rise projects have gone back to the banks financing them. Newport Lofts, the Cosmopolitan, Turnberry Towers and Mira Villa have all been taken over by the banks due to bankruptcy. Two more projects can be added to that list, Streamline Tower in downtown Las Vegas filed for Chapter 11 bankruptcy protection this past Wednesday and One Las Vegas has officially been taken over by the lender, Corus Bank of Chicago. Corus Bank also financed $125 million for Streamline Tower.
Only 10% of Streamline’s 275 units are sold. The rest are being actively sold as the reorganization plan works through the courts.
While bad news for the initial investors, this is great news for Las Vegas high rise condo buyers. One Las Vegas condos are being offered by Corus at approximately half of what they sold for new. Other projects have felt the pinch of buyers dropping out of escrow. Last month the Allure had an auction to sell 10 condos that fell out of escrow. They wouldn’t release the specific results of the auction, other than [click to continue…]