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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

CityCenter continues to close condo sales

21 June 2010

LAS VEGAS, Nevada -- CityCenter has closed sales on nearly 200 of the 2,400 high-rise condominium units available at the Strip development.

According to figures compiled by Union Gaming Group, which has been tracking condominium sales at the project, the sales totaled $185 million. The closings were through earlier this week at CityCenter's three residential offerings — Mandarin Oriental, Vdara and Veer Towers — which began closing sales last month.

"CityCenter has been closing, on average, about 33 residential units per month," Union Gaming Group principal Grant Govertsen said. "This is well in excess of the market average, which is about four units per month."

The $8.5 billion CityCenter is 50-50 owned by MGM Resorts International and Dubai World, the investment arm of the Persian Gulf emirate. In the first quarter, MGM wrote down $171 million in the value of CityCenter's condominium units.

MGM Resorts Chairman and CEO Jim Murren said in an interview after the company's annual shareholder meeting that any condominium sales at CityCenter have been a bonus in a challenging market.

"We have been fairly pragmatic in our attitude toward condominium closings," Murren said, "We understand the market we're operating in and we understand the difficulty buyers have in obtaining financing."

Murren said the number of sales that have closed at Veer in the short time that the building's units have been on the market was a good sign.

"We're making progress. I think pragmatic is the right word for us," Murren said.

There are 227 condominium units on the top floors of Mandarin Oriental and 670 units at the twin-towered Veer. Vdara, CityCenter's condo-hotel component, has 1,495 units.

Mandarin Oriental has closed sales on 39 units for a total of $93.9 million, which averaged out to a price of more than $1,200 per square foot. Excluding sales of penthouse units, which are as large as 4,000 square feet, Mandarin Oriental sales have averaged about $1,000 per square foot.

At Vdara, 120 units have closed for a total of $74 million, with an average of almost $800 per square foot.

Veer has closed sales on 37 units for a total of $18.7 million, or $600 per square foot.

MGM Resorts took a $255 million operating loss on CityCenter in the first quarter. That includes results from the 4,004-room Aria hotel-casino, the development's centerpiece. Murren expects CityCenter to show a profit when the second quarter ends this month.