Las Vegas Project Survives a Case of Bad Timing
At Aria, CityCenter’s 4,000-room hotel and casino, results announced by MGM in the second quarter of 2012 showed occupancy at 93 percent and an average daily rate of $201. At Vdara, occupancy was 89 percent and the average daily rate was $161. In May 2009, Aria initially was booking rooms ranging from $179 to $799 a night, and suites ranging from $500 to $7,500 a night.
CityCenter’s condos tell a similar tale of slashed prices, but in their case, prices may not yet be low enough. Tony Dennis, an executive vice president for the residential division at CityCenter, said CityCenter will soon introduce a new marketing effort, aimed largely at international buyers. This effort will most likely occur in the new year and will offer condos at even lower prices. At the same time, CityCenter has taken on the role of financier, assisting about a third of its buyers with loans, he said.
Currently, at CityCenter’s Mandarin Oriental, 65 units out of 225 have sold; at the two-tower Veer, 272 units of 669 have sold; and at Vdara, about 156 of the 1,495 units sold before the conversion to a hotel.
“Back in the day, at Mandarin, we were priced at about $1,600 a square foot on average, and today we’re priced at $840 a foot,” Mr. Dennis said. “And I think that still is a little high for the market. At Veer, in 2007, we were priced at $1,000 a foot, and we’re now at just over $600 a foot.”
Total residential revenue to date from condos and condo-hotel units is about $393 million, Mr. Dennis said.
Given the adverse conditions of the Las Vegas real estate and tourism market in 2008 and 2009, CityCenter’s condo sales and hotel bookings stand out in comparison to some other Las Vegas businesses. There are plenty of examples of half-finished or never-started hotels and commercial projects in Las Vegas, both on the Strip and off.
At Crystals, CityCenter’s 500,000-square-foot luxury mall, upscale retailers have been slowly leasing storefronts, from Gucci and Prada to Hermes and Tiffany & Company. The center still has to lease its 30,000-square-foot third floor and is close to leasing the last three spaces on the lower floors, Mr. McBeath said.
“As the retailers have enjoyed the success, and the growth in same-store sales,” he said, demand for the remaining spaces has risen. CityCenter doesn’t release its leasing rates or revenue-per-square-foot figures.
CityCenter officials said that the development had created about 11,000 jobs for Las Vegas, and added a significant $40 million public art program on its campus, with work by artists like Henry Moore, Maya Lin, Claes Oldenburg and Frank Stella.
While Las Vegas is a city of novelty and reinvention, real estate experts said the city cannot support much new development. Construction has started on two giant Ferris wheels modeled after the London Eye, and a third one is rumored. Some smaller hotels and shopping centers have also started construction, but there is almost no new hotel casino development anywhere on the Strip, Mr. Mixer said.
“The rising occupancy and rate numbers we are beginning to see in our market still won’t support new development,” he said.
Its a common knowledge that buying the right luxury property or selling your current property depends a great deal on finding the right Real Estate Proffesional.