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Best of Howard Stutz

Gaming Guru

Howard Stutz

Few condo sales at CityCenter, but analysts satisfied

13 April 2010

LAS VEGAS, Nevada -- CityCenter has sold 25 of its 2,400 high-rise condominium units since sales began closing at the end of January.

The figure represents just 1 percent of the $8.5 billion development's residences. To some analysts and investors, the number of condominiums claimed is 100 percent more than they expected to be sold at CityCenter.

"We do not believe investors are ascribing any value to residential sales at CityCenter, so every unit that closes represents upside to expectations," Union Gaming Group Principal Grant Govertsen said.

The analyst authored a report on the Strip's diminished high-rise residential market in January, saying there had been a slight thawing in sales, but that prices were continuing to decline. CityCenter's condominiums represent the peak of the pricing market.

Through March 31, the 25 condominium sales at CityCenter had a combined price of $38 million.

Of those units, 19 were at Mandarin Oriental and six were at Vdara. Mandarin Oriental has 227 condominium units while Vdara has 1,495 condominium-hotel units.

Closings at the 670-unit Veer Towers have yet to begin.

The combined sales price of $38 million translated into about $1,000 per square foot.

"We are encouraged by the quick closing of these units in the still early days of the process at CityCenter, although we acknowledge they represent just the tip of the iceberg when considering there are nearly 2,400 residential units between Mandarin, Veer and Vdara," Govertsen said.