Cosmopolitan Las Vegas High Rise Condo Developer Has Seen Foreclosure Situation Before, With Long-Term Happy Endings

"This action by our lender comes as no surprise. With the current challenges within the real estate and debt capital markets, which are out of our control... we both anticipated and planned for this."

That's the statement Cosmopolitan developer Ian Bruce Eichner made regarding news that his $3 billion dollar Las Vegas high rise develpment is now facing foreclosure as a result of defaulting on a $760 million construction loan from Deutsche Bank.

Surprising statement? Perhaps, but then again... In his past dealings, Eichner's also lost control of two major high rises in Manhattan that today are complete successes, the 70-story CitySpire and the 42-story tower at 1540 Broadway. It appears the Cosmopolitan's another high rise, high quality project that'll eventually get built without him in control.

MGM Mirage is reporting that sales on Project CityCenter, which is also anticipating a late 2009 opening, are still holding strong, with half of the available 2,647 condo units "sold" for $1.63 billion. That's feuling speculation that they may be in the market for acquiring the Cosmopolitan project as well.

"I think the Cosmopolitan is going to get built," said Frank Fantini, a Dover, Delaware-based casino consultant and publisher of the Gaming Morning Report. "It's well under construction. At worse it will be a beautiful thing for MGM to buy."

And that's what it is at this point - pure speculation. Someone will buy it (though I really doubt it will be MGM), finish building it, and continue the tradition of successful "Eichner-less" properties such as the previous New York examples. The fact that construction hasn't stopped on the 2,998 room high rise condo-hotel project is a good sign, but don't get caught up when they talk about "sales" statistics. Cosmo will tell you that the project is 84% sold, but not one of those sales has officially closed and I would hazard a bet that many investors holding Cosmo contracts would rather walk away ala another high profile high rise condo project here in Las Vegas than actually close the deal.

Just remember two things: CitySpire and 1540 Broadway. High Rise condos and condo hotels in Las Vegas remain a long-term investment - you can definitely plan on that!