Thoughts on CityCenter Las Vegas

[raptor517]

http://www.citycenter.com/default.aspx

this is going down smack dab in the center of the strip.. and seeing how vegas isnt exactly on the decline.. buying a condo there might not be the worst investment ever.. though at 1k-1500 a square foot(so i hear).. its a bit steep. anyways, anyone have any thoughts on this? just something i was looking into seemed interesting.

[CrushinFelt]

If anything you'll probably get some long-winded supply/demand arguments in this forum. You should talk to people who actually have history in the LV area and the strip in particular. I know a lot of people in the real estate biz (from real estate agents to a director at KB Homes in L.A. to entrepreneurs in Nashville), and one common theme is that timing is everything. You should definitely talk to someone with a good deal of history in and around the strip.

As for my advice, you'll likely be paying a pretty sick amount for a place there (I don't mean "omg $1k a sf", but rather relative to what prices would have gone for even 5 years ago). One reason for this, if you pay any attention to financial news, hotels (particularly for their real estate value as well as being cash cows) are very serious buy-out targets right now. The problem is that everyone knows this and that's why you'll be paying out the ass for a condo there and I don't know if a sector gets any hotter than when Private Equity is taking a hard look at it.

I also know that when I interviewed with Harrah's, one of the questions they asked me (after their acquisition of the Barbary Coast) was to talk about my view on the possibility of turning it into condos. Without even talking about the construction aspect of it, the main point I hit on (and which they were totally in agreement with) was that with all the supply coming in (i.e. CItyCenter) this would be extremely risky because they weren't sure how large the market was.

Summary: It's not something I would do right now for speculation purposes. Private Equity has already made it loud and clear than real estate in and around hotel properties is very hot and thus I think you'd already be paying very speculative prices.

[pig4bill]

Aren't there a number of gigantic condo projects that got cancelled? Plus Vegas residential real estate in general has been tanking.

[raptor517]

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Side note: i spoke to an agent here yesterday (Bellagio) and they said the project will not be complete until 09. Given that and the market dynamics...and the fact that condo projects in Miami (an overheated market that crashed/is crashing) and other places have had to resort to auctioning off/severely discounting remaining units...i'm going to bide my time here and see how things wash out. Seems like the smart play.

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i agree with that blueman, i looked into it a bit more, and decided that it might be a much better deal to hold off and try to pick something up at discount/auction when it turns out people cant afford 1300 a square foot.

[Fishhead24]

Would never live in Vegas again.

The city was fabulous pre 1990 and it is very sad to see what has become of this once great, great city.

[TxRedMan]

[ QUOTE ]
[ QUOTE ]
Side note: i spoke to an agent here yesterday (Bellagio) and they said the project will not be complete until 09. Given that and the market dynamics...and the fact that condo projects in Miami (an overheated market that crashed/is crashing) and other places have had to resort to auctioning off/severely discounting remaining units...i'm going to bide my time here and see how things wash out. Seems like the smart play.

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i agree with that blueman, i looked into it a bit more, and decided that it might be a much better deal to hold off and try to pick something up at discount/auction when it turns out people cant afford 1300 a square foot.

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raptor,

i wouldn't reccomend buying anything in LV right now. if you look at the market over the last ten years, you'll see that the price of real estate has increased dramatically. LV was growing as fast or faster than any other city in the US for a steady couple of years, which flooded the market with new homes and caused the price of real estate to spike, and iirc it hit its peak a little over a year ago. people were buying condos and selling them before they were even built and sometimes doubling their money. the problem is that the growth has tapered off, but there are still hordes of condos being built, and most of them upscale. there is a distinct difference with city place as it is on the strip, and the land on the strip has a much better chance to appreciate ($1.00/acre 70 yrs ago? $25,000,000/acre now iirc), so it's unique in that regard, and of course, location, location, location. still, i think that it would be a poor investment with the markets current condition and the likelihood that it will continue to decline slowly over the next couple of years.

i think that city place is a getaway for the uber-rich who aren't buying the condo with any thoughts as to return on investment in the next ten or fifteen years.

[Taylor Caby]

i have a friend who is working on the project. i will ask him more about what he is hearing when i get a chance.

i doubt it makes financial sense though - if you can get someone to rent it year round then maybe but it sounds like youll want to use this place during the WSOP and other visits to Vegas. i guess best case scenario you have a friend that's cool that you rent it out to 11 months a year and you get it during the WSOP. Or maybe you could get a 2 bedroom place and you make a deal with one of them that they have to sleep on the couch whenever you are in town.

still, everything i've heard (and seen) about the vegas real estate market makes me think you are better off doing something else with your money.

tc

[CrushinFelt]

Bump for a lil' newson the topic:

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