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A look at the new model condos April 14, 2010, at the Mandarin Oriental Las Vegas at CityCenter.
Friday, May 28, 2010 | 1:16 p.m.
The Residences at Mandarin Oriental
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The Residences at Mandarin Oriental unveiled the first finished models of their condominiums Wednesday. They range from 1,000 to 4,000 square feet and are priced up to $8 million.
Sun Archives
- Lawsuit filed against CityCenter over Vdara condo-hotel units (4-16-2010)
- Mandarin Oriental at CityCenter unveils model condominiums (4-15-2010)
- Art for locals only (4-5-2010)
- CityCenter hotels’ features at your fingertips (4-5-2010)
- CityCenter condos may outperform market (2-5-2010)
- CityCenter unveils financing program for condo buyers (12-9-2009)
- CityCenter’s Mandarin Oriental makes Vegas debut (12-4-2009)
The closing of condo sales at CityCenter has gotten off to a slow start, according to analysts who track the housing market.
Through the end of April, MGM Mirage and Dubai World, the owners of the project, have closed on 78 of 1,543 units at the Vdara condo-hotel, according to SalesTraq. Closings started in March at Vdara but CityCenter had announced earlier this year it had sold 698 units there.
At the ultra-luxury condominium tower Mandarin Oriental, where 205 of 227 condos were reported sold as of earlier this year, 32 units closed between January and the end of April, according to SalesTraq.
CityCenter just started closing units in the two Veer Towers in mid-May so those numbers won’t be available until the end of June. MGM had reported that 480 of the 670 units had been sold earlier this year.
Through Thursday, MGM counted 110 closings at Vdara, 38 at Mandarin Oriental and 16 at Veer.
“This Manhattanization thing everybody was trying to take credit for a few years ago, the condominium market has fallen on its face in this town,” said SalesTraq President Larry Murphy. "This is the deManhattanization of Las Vegas. CityCenter is right in the middle of the economic (woes), and it is a horrible time to be coming online.”
CityCenter cut prices by 30 percent to lure buyers and help those who have already bought units to be able to close. In December, it unveiled a program to provide financing to some buyers.
“Maybe 30 percent wasn’t enough,” Murphy said. “I am not saying it was or it wasn’t. They recognized there was going to be a problem in getting these puppies closed. It is a great project, but it is not going to be cured with a happy attitude or more intensive marketing. It is not going to be cured unless the economy gets better. People are not spending money on condos or much of anything else. They are trying to save. They are scared.”
Tony Dennis, MGM Mirage executive vice president of residential sales, said closing sales is a work in progress that will take time, but executives are happy with the start.
Dennis said the seller-financing program has about 500 buyers in it being processed to close on units.
He said because units are closing at the 30 percent price cut, there are no plans to reduce it further. Since the prices were adjusted in late October, 18 new buyers have come forward, he said.
“Our prices are good values,” Dennis said. “I wouldn’t say it is an easy process but it is better than we expected and far better than analysts give us credit for. It is still early.”
With the price reductions announced in October, the prices per square foot went from $1,600 to 1,120 at Mandarin Oriental; Veer went from $1,000 to $700 per square foot and Vdara went from $1,200 to $840, according to analysts.
Dennis Smith, president of Home Builders Research, said he’s not surprised sales have been weak because some buyers may be concerned about liens because of a dispute between MGM Mirage and Perini Building Co. over payments to subcontractors. The economy adds another element, he said.
“When it comes to writing a check for a million bucks at Mandarin Oriental to close escrow, are you really ready to do this in this economy when everyone is being told to horde cash?” Smith said.
Luxury real estate broker Bruce Hiatt said some buyers are waiting to close to see if prices may fall even further and prefer a 40 percent to 50 percent reduction.
Hiatt said there continues to be a strong interest in CityCenter, but he said the economy is making prospective buyers cautious.
The dispute with Perini over CityCenter construction payments casts a cloud over the quality of the construction, Hiatt said.
A worker heads down a road leading to one of the Veer Towers during a tour of MGM Mirage's CityCenter project Wednesday, Nov. 18, 2009.
“Until those questions get answered, some buyers are concerned about the project,” Hiatt said.
Dennis said CityCenter has made a commitment to take care of subcontractors and there are no problems with liens. Buyers have a clear title to the property when they close, he said. And he said there are no problems with construction, adding that Clark County certified units for occupancy.
Earlier this month, Houston-based Metrostudy reported that Las Vegas has more than 8,200 condominium units that are sitting empty, including those still vacant in CityCenter.
Murphy said Las Vegas has a 20-year supply of condominiums whose prices are down 60 percent from the peak of the market a few years ago. Some high rises aren’t selling for that much more per square foot than single-family homes, he said.
The Veer numbers should look the same when those closing numbers are available in June, Murphy said.
“Veer is going to have a rough go at it because the last thing we need is another 670 high-rise condos on the market,” Murphy said. “It is a hell of a time to sell condos even if you are MGM. They are not different than anybody else. The image of high-rise condos is severely tarnished just like they are in Miami.”
About 700 units at Vdara remain unsold and those are part of the hotel’s pool of rooms, Dennis said. Buyers of those units can choose to have the room managed by MGM Mirage. Whatever isn’t sold will be put in the hotel pool, he said.
What a catastrophe!! At the current close rate, CityCenter will be flogging these overpriced boxes for years. If they lower prices again, will they have to offer rebates to those who bought at the higher price?
There's no upside to this mess for MGM and Veer will be a Miami-style "ghost building" for a long, long time.
Just to put it in perspective: A couple of months back there was a repo unit in Panorama that was actually on the HUD list! What does that tell you about the future of high-rise condos in LV?
lol
I'll give you $100k today for a 1 bedroom. Offer ends in 24hrs.
your loss. ;)
$1 Million for a 1 bed room . What's the problem?? j/k.
City Center.. A mistake from the first piece of concrete chipped away from the Holiday Inn Boardwalk for demolition to today.. Greed = Bust
Do people who buy these condos (well the few who have bought them) actually live in them or just rent them out? I just can't see living on the Strip as desirable.
Remember that there is also the exhorbitant HOA fee attached to each condo that would probably equate to a mortgage on a 2000 sqft home sitting on 1/8 of a acre of land.
It would be an awesome company expense or a timeshare... Not too convenient to actually live in it unless you are a City Center executive. Lol... How many other people can take the elevator down to their office? Ha!
The Manhattinization of Las Vegas.... Yuck. If I desire to be in Manhattan I'll go there. It is too bad they can't bulldoze CityCenter and put back the establishments they razed to build this monstrosity.
U.S. GDP grew in each of the last 3 quarters. Some declared the stimulus a failure, when they did not see instant results. The fact is jobs are always lagging the numbers recovery in each recession. But those focused on long-term recovery, know the enviroment will be a big winner in the conversion to biofuels & biopower -- cool site; Balkingpoints ; incredible satellite view of earth
"...Las Vegas has more than 8,200 condominium units that are sitting empty"
Depression in Vegas.
....govt spending trillions did very little to help and just made things worse.
I'm gonna get one on teh cheap at auction when MGM goes belly up.
The ongoing maintenace/operational costs is going to suck up money faster than they can print it. The closing rate is laughable considering the inventory....and more is coming on line in the next year. That button in the elevator labeled "B" is for basement and that's exactly where this ride is heading, no passing go, no collecting $200. Straight to the basement.
creed what cause our problem
TOTAL DISASTER! 8.5 billion and counting$$$$$....Why would anyone want to own a condo in the middle of this mess? What were they thinking and how can they still be in charge? This is going to be a long, brutal summer in vegas! Things are not getting better---lots of cheapo tourist room rates and buffets and even they seem to be losing steam. Lots of people walking around and not spending money in vegas these days.
It's alot of money $1,000,00 to 7,000,000 sgu '.
What would the mait. fees and taxes be?.
What squ' are these condos?
It's just a shame City Center construction was past the point of "no return" when the floor fell out from under them. With a 20year supply of empty condos on their hands in the area,City Center will remain empty for the most part for many many years.Plopping down a million or close to it "now" on a unti in City Center is so risky.I suppose if you were able to walk away for it in 5 yrs breaking even would be ok....but I don't see that happening.
these things are bought by corporations to use as weekend getaways for clients and their salespeople.
go to panorama on a thursday. you could shoot a gun off in that place.
$1,000,000 is just too much to pay for a hotel room, I usually feel like going home after 3 days.
What a shame that the Strip's beauty has been forever tarnished by these out of place, oversized, hulking glass and steel monstrosities. An even bigger shame that they were all built for nothing. The only thing worse than ugly buildings is EMPTY ugly buildings.
"City Center.. A mistake from the first piece of concrete chipped away from the Holiday Inn Boardwalk for demolition to today.."
That's right... The Boardwalk was ohhhh so much better for the area...
They can say that there are no construction problems in existence ( because the county signed off on it ) , and they can say that you get clear title ( regardless of liens in litigation ) ... it just takes some faith on their part ( City Center ) to hope that there are some unsuspecting people remaining to believe it. A 20 year supply of condos including these ... ? This project will be in trouble this year , next year , the next decade and forever.
You'd have a shot of a better day coming for Lake Las Vegas before CC.
So I'm a bit confused: Some people say the problem is "greed" by today's corporate casino owners. But casino owners back in the day owned them to make money, as opposed to altruistic reasons.
So can someone be more specific about how "greed" on the Strip has backfired, as opposed to the property owners trying to keep the Strip updated and modern and relevant and fresh and cutting-edge -- and profitable for stockholders -- only to get whacked by the economy?
I'd like to read that kind of a discussion.
Yes, the freakish clown of Boardwalk would be such a better sight on the strip...
"greed" = poor people's definition of profit.
Tom, you are correct. Those that want all others to fail - call it greed.
We are closing on our condo for a "reduced price" next month...can't wait for those that call the place a failure to condemn mock us...all I can say is "come on by if you aren't afraid to enter the Center". More than happy to discuss the failure of City Center with you.
"... Clark County certified units for occupancy."
Based on that endorsement, I'll buy one!
I can pay 'bout tree fitty.
When they opened Vdara for sales, the beginning price was $500k for around 550 sq. ft.. Come on, this is NOT the UPPER EAST SIDE OF MANHATTEN, and who would pay that kind of money for a 'studio' apartment on a low floor with a view of a heater vent any way? Okay, so a nice studio in a nice building with a Park Ave. address is 1 mill, but come on, Harmon Ave in NOT PARK AVE!
Definitely there was a land rush mentality driven by money to be made.
I guess you could characterize that as greed, as in "We'll make a lot of money!"
Seems like a fair statement, unless I am missing something.
Chunky says:
From day 1, VP Tony Dennis and ED Tracy Nalewak lacked the experience to market a project of this size, much less a project with a residential component. They did little more than play Pin The Tail On The Donkey blindfolded trying to fake their way through it.
Cheaping their way through and cutting corners to create the least memorable market program in history. For heavens sake, the project got more recognition from bad press than it did from their work. The shoddy Westgate timeshare across the street ran circles around them.
Where was the creative? Why did they meet with the best creatives in the business and then try to hack something together using in-house staff? Minor league mentality with big league problems.
We had great talent come in, only to be ignored or have their hands tied by flea market bargain basement shopping.
Jim and Bobby should scrub this department clean from the top down starting with Dennis and Nalewak and transfer them to Biloxi or lay them off in the coming wave of CityCemetary layoffs!
To Tom Gorman (Staff):
It does appear to me that greed has been the biggest factor in the current state of the Strip. The greed involved was that of trying to make money without investing any of one's own assets, that is, by gross overborrowing. The greed was likely also prevalent in the upper echelons of management, getting caught up in trying to make the company shares as high as possible on a quarterly basis in order to trigger bonuses and stock options.
i can't believe they've even closed on any of them. who are these buyers? probably out-of-staters and foreigners, aka uneducated buyers with money to flush.
obviously our friend from canada does not a) own stock in any companies and b) has never ran a business.
if i found out upper management of a company i owned stock in was NOT trying to get the share price as high as possible...i'd be calling my attorney.
Sure, if you could secure one for 100K it ia good deal compared to what they were asking originally. But check out the monthly HOA fees. $1000 a month. That would almost support another 200K of mortgage payments. So you are actually paying 300K for that 500 square foot 100K apartment. In a town you can get a worry free decent hotel room for 60 bucks a night. The prospects of appreciation in the next 5 years is grim. And by then you have eaten 60,000 in HOA fees. When you add loss of opportunity on that money and the taxes, you need to hope it doubles in value in that time frame. Even were that likley that would be to just break even. So you have to ask yourself some hard questions.
Also in Vegas today 300K buys a 4000 square foot Toll brothers home in some areas. But of course that is not a fair comparison to a 500 square foot hollow block of concrete overlooking a parking lot on the strip
I think there are close to 3000+ "condos" at CC. 90% of them are not sold from what I can tell. This is a major problem for MGM. They can't just dump the condo's at fire sale prices. They can't convert the condos and sell them as hotel rooms -- that would be bad for Aria. How will thousands of empty condos sitting for years at CC impact MGM's bottom line? I would suspect MGM might be in big trouble if this issue is not resolved. I don't know the numbers and I don't know the math of the condos in relation to the bottom line, but this has got to be a drag on MGM that just gets worse and worse..
I don't think the building of the condos in this project by MGM has anything to do with greed. They made a bet on the condos based on the information they had at the time. They just made a bad bet, a really bad bet.
Check out my blog about Las Vegas:
http://jimmyhoofa-lv.blogspot.com/
Well, then, "stevem", you might just be calling me. I ran my own law practice in Canada for 36 years before retiring last fall.
You are half right, though. I don't currently own any stocks, as I have convinced myself that the stock market is a complicated form of Ponzi scheme in which the insiders are virtually guaranteed a nice profit, but the rest of us are lucky to get a few crumbs.
MGM Mirage pushed the envelope on the CityCenter project, with grandiose ideas, and as far as I am concerned, greed and hubris were more of a factor than stupidity or atrocious timing.
Prudent management would have had a better inkling of the possible downside of such a mammoth investment.
They should just rent these out starting out at $500 for the 1 bedroom.
That way they get filled up & make atleast something out of nothing.
But it would look like some projects housing building.
Albeit this city center condo idea was a "project"...
If you live here,and frequent the strip even a few times a week,You know that CC is a disaster PURE and SIMPLE
The locals made comments about this lip sticked pig 2 years ago,and so far every one of us uneducated,hee haw watching,granola eating posters have hit the nail on the head with this
Starting around 2006-2007,The spending habits of all responsible adults changed,INCLUDING the rich,and evidently with only 8% of all condo units sold we morons were right!
There is about a tenth of a percent of people in this world,that pay upwards of 1,000/sq ft,AND they are not taking up residence here PERIOD
I have always maintained that anyone that visits CC sun-thur will see the real indicator,and realize immedietly that this CC,and surrounding properties cannot SUSTAIN there expenditures
CC is far from over atleast from the media anyways
peace out
Please excuse my ignorance but what is this HOA fee you are speking of? I know you must pay maintenance fees and taxes but that should be it,
there's an hoa fee at these places, just like any other "neighborhood".
My friends and I have made bets about which property MGM will have to sell first to try and deal with the CC debt/problems:
Mirage 1/2
NYNY 3-1
Luxor 5-1
I took Mirage. I think the guy next door with the smokin' hot Russian wife will swoop it up.
Check out my blog:
http://jimmyhoofa-lv.blogspot.com/
when will vegas realize that rich people will not get you out of this mess. rich have killed the middle class at cost of everyone. good luck vegas
$1000 a month HOA's? ggeezzz - good luck..hope new buyers read THAT fine print !!
Jimmy,I put my money on MGM selling Circus Circus...but who would buy that dump????
I can tell you that the legal issues as well as the poor construction issues will keep any real strong buyers away from this project. It claims to be world class, it is not even close. It is incomplete, and has a unfinished look about it.
I do wish them luck, but there is no way world class travelers are going to buy here. Stop and visit yes, live here, no way.
we were saying YEARS ago--don't build it-don't build it--don't build it----They could have scaled it way back and done it in pieces or just the casino project to start and pushed the project timing back as far as possible--now you've got 6000k more rooms that you can't fill at prices you don't want to charge to people who have too little money to gamble. And it wasn't just this company--the encore and palazzo and hard rock expansion should have been pushed back or canceled also--they have all hurt everyone with the oversupply of rooms and gambling and bars.
Gotta hand it to Obama, he can campaign for Reid but not for Las Vegas.
Hoky-doky bingo, I up my offer, "Won mirrion?"
I work to make money.
I invest to make money.
I sell things for money.
When I gamble, It is with the desire to make money.
In the minds of some of those who post....that makes me greedy.
Oh and bldblu, Hee Haw is very popular here in Bakersfield, my friend Buck made a lot of money off of it over the years, my last conversation with him was about Las Vegas!
Mr. Gorman,
When people speak of "Greed" in their comments, they are referring to the fact that the corporate property owners who have overbuilt the strip with these unrealistic developments which they mistakenly thought were going to be as profitable as the previous properties which were imploded. The problem is that not only were just buildings imploded, but so was the very thing that made them successful to begin with, concern for the quality of hotel service and the gambling experience for their players. These corporate thieves today have ruined the table odds, and tightened up the slots machines so much, that the players don't have any desire to come in and be fleeced.