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Best of Howard Stutz

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Howard Stutz
 

CityCenter condos bring in $490 million

16 February 2011

LAS VEGAS, Nevada -- CityCenter condominium sales, once anticipated to be a $2.7 billion business venture, brought in $490 million in revenues in 2010, according to figures supplied by MGM Resorts International in the company's year-end financial release.

The 67-acre Strip development has three high-rise residential developments -- Mandarin Oriental, Vdara and Veer Towers -- encompassing 2,400 condominiums. Through December, MGM Resorts said it had closed sales on 436 units; 61 at Mandarin, 156 at Vdara and 219 at Veer.

Sales activities slowed in the fourth quarter and analysts aren't expecting much of an upswing in 2011.

According to MGM Resorts, the company closed sales on 26 high-rise condominiums between October and December.

Two of the sales, one each at Mandarin and Veer, were new sales and not related to previous sales activities.

The company said it took in almost $26 million in revenues for the residential operations in the quarter, $8 million of which was related to forfeited residential deposits.

"Going forward, we would look for the velocity of residential closings (and) proceeds to slow down relative to 2010 now that the bulk of Mandarin and Vdara initial contract closings are in the rear-view," Union Gaming Group principal Bill Lerner told investors. "As such, we do not anticipate any significant residential closings in 2011."

The high-rise residential market along the Strip was a victim of the soured economy over the past two years. Several projects were halted, some in mid-construction. CityCenter remained active in the luxury condominium market, attempting to close sales on units where customers invested as much as 20 percent down payments.

Prior to the opening of the $8.5 billion CityCenter in December 2009, MGM Resorts -- which owns the development in a 50-50 joint venture with Dubai World -- implemented a price reduction for the condominiums and secured a company to help with the closing process.

During the company's third quarter, MGM Resorts took a $46 million noncash impairment charge on the residential offerings and took 600 of the condominiums off the market at the 1,495-room Vdara. The units were placed into the Vdara's hotel inventory.

Also in the third quarter, CityCenter began a leasing program for the condominiums. By the end of December, the company had rented out 85 of the units; 39 at Mandarin and 46 at Veer.
CityCenter condos bring in $490 million is republished from Online.CasinoCity.com.