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July 31, 2014

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Westin Casuarina faces hardships amid economic downturn

Westin Casuarina

The owner of the Westin Casuarina Hotel, Casino & Spa in Las Vegas isn’t commenting on how the property is performing during the recession, but real estate watchers say the 826-room property may face foreclosure.

Fitch Ratings today downgraded a class of Wachovia Bank Commercial Mortgage Trust securities issued in 2005, citing several problem loans around the country.

One of the loans that was pooled and sold to investors in the Wachovia securities is secured by the Westin Casuarina on Flamingo Road just east of the Las Vegas Strip.

The Wall Street Journal reported in August that, according to debt rating agency Realpoint, the Westin Casuarina was four months delinquent on its $150 million mortgage.

Both Realpoint and Fitch have reported the loan has moved into special servicing.

They say the property’s owner, hotel operator Columbia Sussex Corp. of Crestview Hills, Ky., has requested loan modifications while the special servicer pursues the foreclosure option.

Like other Las Vegas properties, the Westin Casuarina has suffered during the recession with Fitch reporting occupancy there averaging 60 percent in the 12 months ended in September 2009.

That’s down from 61.5 percent in the 12 months ended in June 2009.

As the property is privately owned, more current numbers are not available.

By trying to maintain relatively high rates, the occupancy at the hotel in 2009 ran well below the citywide rate, which in September 2009 was 83 percent.

Fitch reported in January that for the trailing 12 months ended in June 2009, the average daily room rate was $118.67 and revenue per available room per day (REVPAR) was $72.98, with REVPAR down 26 percent from year end 2008.

The property generated cash flow of $7.9 million during the 12 months ended September 2009, well short of annual interest obligations of $11.9 million, Realpoint reported, according to the Journal.

Fitch noted the former Maxim was constructed in 1977 and underwent an extensive repositioning and a $90 million renovation in 2002, when it reopened under the Westin brand.

Besides the hotel, the Westin Casuarina includes a 13,500-square-foot casino with 265 slot machines and 10 table games, as well as a 25,000-square-foot convention center.

A call for comment to Columbia Sussex hasn’t been returned.

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  1. The old Maxim was a nice "near the strip" value proprtty. They had deals to offset it's O.K., but not prime location. Going upmarket as the newer upmarket places in that price range are discounting doesn't work very well. That property will always be best known as the place where Tupak met his demise.

  2. I meant to say "property".

  3. We need a Federal Government program to help businesses refinance at lower rates.

    We also need to change Nevada's constitution so we can have jobs-business programs like other states such as New Mexico.

    This casino did a very nice renovation of the old Maxim, but heir comps were cheapo.

    The Wall Street Journal says that Nevada gambling will suffer including Las Vegas if Reid and the Congressional Democrats are ousted.

    Even "the unemployed are hobos" Heller know that Nevada will be hurt if Reid is voted out.

  4. Now I understand how come they do no longer offer the 25 dollar match play coupon in the 2011 American Casino Guide Book :(
    Remember, however, when you are too tight, you might lose the last customers, too.

    From Switzerland

  5. The Westin is boring. The location is actually fantastic for an off the strip property, but they do little with it.

    An enterprising company could do great things with that property at that location. If the building stands at is; it owuld be remarkable if the Westin turns things around unless the economy REALLY rebounds.

  6. Oddly enough, Maxim probably would have done quite well in today's market, considering how hip and chic things from the 70's and 80's have become. Same goes for Bob Stupak's VegasWorld.

  7. I knew someone who worked at the Maxim for 11 years before it folded. It was a gem of a place; small, friendly and priced right. It did not fail because of a lack of patronage. It failed because someone at the top (allegedly) syphoned off cash from the cage. This person (allegedly) did the same thing at the Dunes. Through no fault of their own, the employees paid the price when it closed.

  8. Back in my wastrel days in the 1980's I used to stay at Bally's (which was called MGM Grand when I first started staying there), which is across Flamingo Road from the old Maxim (now this Westin Casuarina). I used to enjoy the slots at Maxim. I also rented a place in the condo across Koval Lane from the old Maxim in the winter of 1993, and the Maxim held "neighbourhood block parties" for us. Now that I stay almost exclusively Downtown, I did not even realize that the Westin Casuarina even had a casino.
    The main thing I remember about the old Maxim was being dealt a pair of 8's, a junk card, and the Ace and King of Hearts. I held the pair and drew the Ten, Jack, Queen of Hearts. That was not the only Royal Flush I ever missed by holding (with the benefit of hindsight) the wrong cards, but it is the first one I missed, so it stuck in my memory.
    I hope this Westin manages to improve its numbers or gets purchased by an owner with deep pockets. Las Vegas does not need another closed-up hotel.

    FromBellevilleCanada (Don Desaulniers)

  9. FromBelleVilleCanada

    2 weeks ago, I missed a Royal Flush, but I would of played the hand exactly the same way again (and therefore probably will miss the Royal Flush once again in the future....). Here's what happened:

    I was playing double-double bonus poker at the Palms, and the cards that were dealt to me were the following:

    Ad-Ac-Kd-Jd.....and a small card i can't remember, either a deuce or a three, no suit. So I had to decide whether to keep the two aces or go for the remote chance, the 3 Royal flush. While I held the cards, I saw the 3-Royal but I was sure that you MUST HOLD the aces, especially on a dd-bonus machine. So I knew that the last I would like to see now after the draw is the two big diamonds, and I drew the 3 cards.....dang!!! 10 of diamonds and queen of diamonds as the first 2 cards that were dealt. Unbelievable. But I just can't throw away a pair of aces on a game such as this, can I ? It wasn't even a progressive, so I did what I had to do. In hintsight I would have rather kept the 3-Royal, but that's about 990:1 against hitting it, and that's once again why you should only keep the 3-Royal if you really don't have any other options ;)

    Best regards from Switzerland

    Boris

  10. I hope they can hang in there and make this property appealing. It's an excellent location.