‘Condo King’ Related Halts Another Las Vegas Project
Another Las Vegas condo tower has halted operations. “The $3 billion Las Ramblas luxury condominium-hotel project backed by actor George Clooney is no longer taking reservations at its sales office on Convention Center Drive. ‘The sales office is not closed,’ Related Las Vegas President Marty Burger said Tuesday. ‘There are lots of rumors. Don’t believe everything you hear. When something is concrete, we’ll call you. I can’t talk about it now. Sorry.’”
“Related canceled its twin-tower Icon project on Convention Center Drive earlier this year and pulled out of a proposal to develop the 61-acre parcel in downtown Las Vegas. When he announced Icon, Related CEO Jorge Perez said he’d ‘never given a project back to the bank.’”
“‘Rumors are flying and I know that,’ Jim Stuart, principal of Centra, responded to an e-mail inquiry about the status of Las Ramblas. ‘I think we will have some answers that I can publicly put out in a week or two. Right now, it is all speculation.’”
“Owner Peter Morton planned to add 1,500 condominium and hotel units to the Hard Rock in a project called the Residences, Flats and Bungalows. That project has also been put on hold while Morton negotiates a sale of the Hard Rock.”
And an update on the recently halted Curve project. “Paula James, vice president of the Curve, said sales have been suspended, but the project has not been canceled. Developers had a 180-day contingency period to reach 75 percent presales required for financing and failed to meet that goal, she said.”
“Most lenders want to see at least 60 percent in presales before signing off on financing. ‘It (presale percentages) kept going up as the media got more negative,’ James said. ‘The number kept going up as other properties continued to not be built. It just made lenders nervous.’”
“Bob Joseph said he liked the looks and location of the Curve, but he didn’t like the contract. The deal, he said, allowed the developer to change the floor plan specifications and required the buyer to pay the escrow fee and seller’s tax. ‘That’s when I started to say it’s not the right deal,’ he said. ‘We were looking at it as a rental. If there’s going to be a glut of condos built in Las Vegas, it’s not going to be a seller’s market.’”
Are we waiting to find out whether we can save these projects by turning them into casinos or sell them to some time share outfit? Maybe we could even sell them to a Boy Scout/Girl Scout Organization for a summer camp.
I can’t think of a market that could be considered more speculative than Vegas. Would locals/casino employees possibly be able to afford any of these places?
I ask that question as well, but then again they don’t build em for locals until it starts to hit thier pocketbooks. Same thing at my workplace, how many of my co-workers would be able to afford thier “home” at todays prices/rates with what thier incomes are at? Not many, a handful at most.
my company has 175 employees. i think maybe 10 of them own their own place. i’m the corporate controller and i can’t even afford to go buy a sfr here in west l. a.
i’m not spending 3/4 million dollars on a little 3 & 2. no way
The thought originally was that businesses from around the country (and even world) would buy these luxury condominiums so they could always have a place ready whenever someone came into town, which is actually quite often given all the conventions and different things going on all the time.
A few luxury towers would have met demand, but once there seemed to be around 50 of them (I don’t know the number), then they got into serious trouble.
Spunkmeyer: HEY NOW!
Just because 6 high profile Condo HI-tower deals have blown up in 6 months is no cause for a remark like that! The other 40,000 planned units are still scheduled for production. Never mind that the NYC lifestyle (IE east coast) is on the other coast and Las Vegas is more laid back west coast style - California style transplants. Who wouldn’t want to pay $500,000- $1,500,000 for a space in an empty building when you come to gamble?
And then there is today’s RJ …Headliner “land” prices in 4th Quarter DOWN 45-37%!!!!versus Q4, 2004 based on actual County sales.. Now what have you to say for yourself? {just like San Diego several months back..the problem was in the MIX}.
So you see, Spunkmeyer, “The Eagle has “landed” SOFTLY!
“Most lenders want to see at least 60 percent in presales before signing off on financing. ‘It (presale percentages) kept going up as the media got more negative,’ James said.
Love it…Blame the media for causing the panic. I’m sure it has NOTHING to do with the fundamentals. What I can’t figure out is, if these developers are pulling out of the market, why do they still feel the need to defend/talk up the market? Why can’t they say “The market just isn’t there so we are giving money back” - Maybe it’s an “Honor among thieves” thing for the remaining developers still in the game.
As an aside, this is the same excuse Enron execs are using (”It was a classic bank run that caused us to go down; our fundamentals were sound”).
OT slightly but gives more insight into what happens when money flows to freely.
Top Ten Millionaire Counties
The number of millionaires rose to a record level in 2005, and more than 1.1 million of them can be found in just 10 counties.
A Rich Market for Decadent Digs
By Janie Ho
BusinessWeek Online
Wealthy buyers are snapping up trophy homes at a record pace — and now, they’re looking beyond the sunny states
biz.yahoo.com/special/trophyhome06_article2.html
The URLs are not working. Can you name the counties? Thanks.
URL:
URL:biz.yahoo.com/special/trophyhome06_article2.html
great family values place- cheat on your spouse ads
OT anyone have a chart of Denver RE prices from 1980 to now ?
Denver featured on channel 9 this am
financial stress peice
2 morts can’t sell
clooney smug not smog
anyone see southpark last night !
ROFLOW
The Las Vegas market is definitely changing, and not just with the condos. There is a noticeable difference in teh air. Just spoke to an escrow agen this weekend and she says that things have slowed dramatically. Things were absolutely dead, and are starting to pick up slightly but a pale trickle compared to last year.
Simmsays…
AmericanInventorSpot.com
Simmssays,
Just curious, a friend is relocating to Vegas and I had to talk like a “dutch uncle” to keep him from buying. He finally agreed, thank goodness! There seems to be a number of “rent to own” schemes cropping up, any thoughts there?
DinOR…Why buy LV’s average place (2200-2400 sqft.) for say $390,000 to $445,000…W/ mortgage taxes and insurance probably runs $2,400 / per month…..When you can rent equvalent for $1200-1600….Time is on your friends side….After your “dutch uncle” gets the Landlorrd to fix her like he wants, in 2008 make an offer. Say around $250,000!!!Using the $1000/per month savings for the down….Cheap digs !See Land values drop post above!!!
The Las Vegas market is definitely changing, and not just with the condos. There is a noticeable difference in teh air. Just spoke to an escrow agen this weekend and she says that things have slowed dramatically. Things were absolutely dead, and are starting to pick up slightly but a pale trickle compared to last year.
Simmsays…
Two words; “lenders nervous.” Truth be told; lenders scared. Not coincidentally I had two friends call yesterday both complaining about their financing falling through. First one paid $5500 for the banks’ appraiser on a small commercial property and when it made the numbers the bank suddenly added new conditions. Conditions based upon the banls’ intimate knowledge of their position designed to make them balk. She told them straight out, you just don’t want to make this loan right? They admitted it off the record. Second in a house sharing arrangement for a dozen years, executor and a tragic roommate death. The bank just said no at the last minute. I told them both the banks are slowing the velocity of lending and building warchests against the flood of defaults. The agreed from their frontline observations. LV condo projects are swimming naked and now everyone knows it. Best, the reason they need “a few weeks” is because the deposits are not in really escrow even if technically it appears thet way, they are leveraged and there’s no way to pay them back.
http://www.azcentral.com/arizonarepublic/business/
Article on the Phoenix market.
Saw a recent interview with George Clooney-
When asked about his condo project in Las Vegas, he spoke positively about it, mentioned it would be “built in stages”…
But most interesting to me was that his body language was telling me he wasnt that in to it.
MY POINT is that alot of realtors, flippers, mortgage lenders etc. are doing the Positive Spin Wordsmithing… but you can tell that they too, are not that into believing what they are saying is true.
I know the Ivana Trump deal died. Then Icon. Now this. Does anyone have a list of all the projects that have been halted or otherwise stopped in Vegas?
BubbleTrack.blogspot.com
I am absolutely amazeed, just talked to a friend of mine last night and found out she owns four houses in Las Vegas as investment properties. She then tells me they are all I/O loans for a 30 year mortgage. How can you have a I/O 30 year mortgage????? She claims she now puts excess money back in her pocket because of the money she saves by going I/O. I asked when if ever does a mortgage company just give money away.. she had no answer.
Could be a I/O for the first 10 yrs of a 30 yr fixed. From what I’ve seen in the last couple of years, they seem to have been pretty popular.
Ask her about her tenants. How many arrived in LV within the last 4 years? How many work in either RE or construction? How many are two wage earner couples?
You know, if she bought 4-5 years ago she’s sitting pretty. She could sell one and pay off the others. It wasn’t necessarily a bad investment plan, it depends on how she reacts to the changing market.
Casinos will be hit hard too. Vacations are the first thing people give up in hard times.
Actually vacations to Las Vegas are not the things people give up in hard times, people go to Vegas more!
Celebrate your friends wealth ! How luck to know someone smart like her !
Well I know 15/15s exist but 30 I/O? Are you sure about this? The 15/15 is a 30 year Amort. and the rate is fixed for 30 but it begins to amortize on the 15th year. It would have to be a 30 yr. I/O with a ballon payment at the end or something. But I”ve never heard of such a loan and that wouldn’t be very profitable.
A good friend of mine bought a place in November on a 30 year fixed / first 10 years interest only loan.
She knows I feel bad for her. But hey 10 years is a long time and it might be worth what she paid for it by the time it turns into a 20 year loan.
my niece bought their SD place using 30 fixed rate, with IO on the first 10, then accelerated on the latter 20.
To accroyer,
What I heard advertised here last year were 30 I/O loans that were fixed rate for the first 3 yrs and then the mortgage really kicks in and kicks the hell out of the buyer. They were promo them here as property values will go up, buy on I/O and sell in the third year before things go up or refi.
“If there’s going to be a glut of condos built in Las Vegas, it’s not going to be a seller’s market.’”
Sorry a-hole, guess you’ll have to get a job now and work for a living.
Crazy,
A buddy of mine lives in a loft hi-rise in Portland. Same deal there, Realtor sits behind oak desk and writes up contracts for EMA and actually gets paid for it. Talk about in for a rude awakening!
While Las Vegas does have a market for the retiring , I think all the builders in different states over estimated what that market would be .Attaching “STAR names” to projects won’t impress the baby boomer crowd .
They didn’t over estimate the demand Wizard….They just thought they could get in & out in time…
“Gross” profits will bring ruiness competition…..
Wizard,
I’m certainly not impressed by George or Ivana but I believe the reason these projects “died on the vine” is b/c the boomers ran fresh out of “bubble bucks” from their primary res. to finance this fiasco. Had the their appraisals supported it I’m sure the equity extraction rave party would have continued.
I guess an update of the shoeshine story is: “when a celebrity starts investing publicly in the venture, it’s time to sell”.
YUP….Just like when the cheeleaders pay $99. to listen to Anthony Robbins and the Donald tell them how easy it is to be a millionaire in real estate in 90 days…
‘I think we will have some answers that I can publicly put out in a week or two.
“It’s gonna take a week or two for the transfer to my Cayman account, which gives me time to gin up the second set of books, and my flight’s a lot cheaper if I book it 14 days in advance.”
Haven’t all these people rolling up projects in Las Vegas heard from LVLandlord that you’ll always lose betting against Las Vegas?
He needs to get his message out there and save these poor souls from their folly!