I've always maintained that the MGM Mirage's Project CityCenter was perhaps the most solid high rise condo project in Las Vegas, and perhaps the most prestigious real estate opportunity in the entire United States. According to an article in the Las Vegas Review Journal, it seems the folks over in Dubai agree, as Dubai World has just purchased half of CityCenter and nearly a 10% stake in MGM to go with it.
By investing $2.7 billion into Project CityCenter and another $2.4 billion for the 28 million shares of MGM Mirage stock, MGM and Dubai have entered into a significant partnership which seemingly should allow CityCenter better access to the Dubai marketplace of investors, condo buyers, and of course casino gamblers.
So while the rest of the world laments the bad economy and reports all the reasons why the high rise condo market in Las Vegas is dead, the people with the money continue to invest and pour countless dollars into the Las Vegas strip. Who are you going to believe? Your local news broadcast, or your own eyes?
This announcement is yet another indication that if you're an investor looking for preconstruction real estate, look no further than Project CityCenter in Las Vegas. Their Vdara and Veer condos already are selling at incredible rates, and the high-end Mandarin Oriental is already sold out with prices that started at $1.2 million. Could all these people be wrong? Absolutely not! In fact, the final part of the project - the Harmon Hotel - is just about ready to go. Would you like "friends and family" pricing? Contact me today!
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4 comments:
I wish I ran into your site much much earlier and read about your view on the condotel. I am currently a condotel owner for MGM Grand Signature Suites. And I have mixed feelings as to whether it was a good investment or a bad one.
Our deposit, unlike like City Centers, was a non-refundable 30% deposit (paid in 3 increments) we really had high hopes (and expectations) for the property. However, while occupancy rates were slightly better than expected the cash flow was far worse than expected.
So far, though we can handle it, we have a negative cash flow. The fees are just too high to offset our mortgage. I am also registered with a group of signature owners who are also very dissatisfied with MGM's rental program, some have just filed a class action lawsuit against MGM Grand.
Others who are also extremely dissatisfied with the program are selling their units at a huge loss. Units that started at the mid 500s one recently sold at 390. Zillow estimates my condo at the mid 200s! We really can't sell or we'd lose our all our equity (the 30% deposit).
Right now, I believe my best option is to hold on and wait for the market to appreciate. You seem very knowledgeable in the Las Vegas condo real estate arena, in your professional opinion, for MGM Grand Signature Suites condotel, do you think they will appreciate above what we bought them for? is there a payoff waiting for all the dissatisfied people if they'd just hold on? Will we be patting each other on the backs a few years from now?
Thanks in advance
I really like the idea of a condo-hotel, and I think in time, those who purchase them will do quite well appreciation-wise. However, from a positive cash flow basis - at least right now - you're fighting a tough battle. That's not to say you won't be happy in the long-term, because I really think you will. The Miami high rise marketplace was very similar in its infancy, and you see how successful investors were with that over the years. Vegas will be the same way, only better - it's just a matter of being able to carry the product for a few years so you can hopefully reap appreciation when it comes time to sell. I can be reached at info@vegasnnn.com or at 702-688-6454 if you (or anyone) would like to discuss further.
P.S. I wouldn't put much stock in the Zillow estimates at this point. They have a long way to go before they reflect accurate pricepoints nationally in my opinion, especially in a niche market such as high rises.
Hello,
As a Signature Tower A owner, and former rental program participant--do you have any information on the class action lawsuit against the MGM? I would like to be put in touch with other Signature owners. Thanks! Yvonne
One of my friends is a real-estate lawyer who specializes in financing large commercial transactions, including casinos. He says that condotels are a great deal -- for the hotel. The "investors" lose big. Buying a condotel unit new is insane.
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