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Best of Liz Benston

Gaming Guru

Liz Benston
 

Hard Rock CEO Planning $1 Billion Condo-Hotel

24 September 2004

LAS VEGAS -- The chief executive of the Hard Rock Hotel on Thursday announced plans to build four condo-hotel towers behind the resort at a cost of $1 billion, locking up a key parcel of land for future expansion.

The towers would be built on a 24-acre site now occupied by the Paradise Bay Club apartments. A Morton-controlled company bought the land on Sept. 17 for $86 million.

Construction is expected to begin next year with the first phase complete in about a year from groundbreaking.

The project includes plans for restaurants, nightclubs, retail shops, a health club and spa. Preliminary plans call for 1,500 units ranging from studios to one- and two-bedroom units and 6,000-square-foot penthouses. Poolside bungalows and villas also are planned.

The project will be designed by Richard Meier & Partners Architects in New York, known for designing such ultra-modern civic landmarks as the Getty Center in California.

"Over the years, patrons have come up to me and told me how much they enjoy the Hard Rock experience," Morton said in a statement. "What we are doing here is giving people a chance to own a little piece of the Hard Rock."

Owners of the units will have VIP access to all Hard Rock venues, he said.

Residential high-rise towers are hot in Las Vegas and developers of all stripes, including those affiliated with casino resorts, are getting in on the action. Fueled by rising land prices and demand from tourists, at least 50 such projects are announced or planned across town, including at least half a dozen condo-hotel complexes.

Real estate experts said the deal makes sense for the Hard Rock.

"It's contiguous property and business is bustling," resort broker David Atwell said. "The condo craze is here to stay. They're going to go after their customer base and they're going to sell (condo units) right out of the hotel," he said.

Condo-hotels are the latest real estate concept in Las Vegas and consist of condominium units that are sold to buyers who can rent them out to visitors by the night.

The concept works well near major resorts because condo owners and renters alike want easy access to hotel amenities, Atwell said.

"It's an upscale experience for just a hotel room and it's an investment on top of that," he said.

Carlton Geer, director of CB Richard Ellis' Global Gaming Group in Las Vegas, said the purchase was "critical" to the Hard Rock because it was just about the last remaining parcel of available land adjacent to the resort.

"I think $4 million an acre is a good price based on the fact that the Hard Rock is going to be able to expand," Geer said. "I think the site would have been sold to somebody and they would have been landlocked."

The newly acquired parcel might also be able to accommodate more hotel rooms, which are needed at the in-demand property, he said.

In an interview, Morton said he had been eyeing the parcel for some time to build condos. He declined to comment further on previously announced plans for more hotel rooms, saying he hasn't made a commitment yet. The Hard Rock is in the midst of drawing up a master plan for expansion that will include the four condo-hotel towers, he said.

Morton declined to comment on financing other than to say that the company has selected Bank of America as its banker on the project. He also declined to discuss possible prices for the units.