Greek Isles owners suggest property might be sold

By Steve Green

Wednesday, Aug. 19, 2009 | 9:42 a.m.

The new owners of the Greek Isles Hotel and Casino on Wednesday said they plan to keep the Las Vegas property open while they assess its future.

Canpartners Realty Holding Co. IV LLC assumed ownership of the property last week, foreclosing on it for $47 million, Clark County records show.

Canpartners is affiliated with investment group Canyon Capital Realty Advisors of Los Angeles.

Canyon Capital and its partner in the Greek Isles deal, Spectrum Group Management LLC of New York, suggested Wednesday the property may eventually be sold.

"We are now focused on assessing the property, and developing a plan to move forward," Canyon Senior Director Richard Bosworth said in a statement. "We want to make it clear that ownership is committed to keeping the Greek Isles Hotel and Casino open for business as we determine the next steps for the property."

"Although the current environment in Las Vegas is challenging, the property’s exceptional location, as evidenced by its proximity to the proposed Convention Center expansion and recent hotel/casino developments on the north end of the Strip, should provide the new owners with significant upside potential through a redevelopment or repositioning of the hotel as the market recovers," Peter Locke, a principal at Spectrum, said in a statement.

In July 2007, Canyon and Spectrum loaned $56 million to investors for the $83 million purchase of the property on Convention Center Drive, formerly known as the Debbie Reynolds Hotel and Casino.

Canyon said the borrower had originally planned to sell or redevelop the property, but due to constraints in the capital markets, was unable to raise funds for redevelopment plans.

At its peak, the property was appraised at $120 million, Canyon said.

Canyon and Spectrum said they are experienced investors in the hotel and casino industries, with successful investments in markets throughout the country.

"The firms will draw on their deep relationships and experience in the hospitality industry to develop a game plan that will maximize the value of Greek Isles," they said in Wednesday's statement.

Delaware Bankruptcy Court records for the 202-room Greek Isles' former owner, GIH-SPE II LLC, show that after defaulting on the mortgage loan, it owed $67.3 million to Canpartners.

The bankruptcy case was closed after Canpartners received permission from the court to foreclose on the Greek Isles, arguing GIH-SPE had no hope of catching up on delinquent payments as the property has been losing more than $86,000 per month.