Friday, Jan. 16, 2009 | 2 a.m.
The decision by MGM Mirage to cancel one of its condo components at CityCenter has some buyers looking for alternatives and Realtors lamenting the loss of income.
CityCenter has decided not to build the top floors of the Harmon tower, where 207 condominiums were to sit on top of a 400-room hotel. Nearly 90 of the units were sold, but the project has been limited to a hotel only because of construction flaws.
Luxury condo Realtor Bruce Hiatt says some of his clients had an inkling that such an announcement was coming, based on what they heard from their contacts at MGM Mirage. Many are disappointed because they were looking forward to living in the luxury condo tower at Harmon Avenue and the Strip and will now be looking for an alternative.
The elimination of the Harmon cuts into the inventory with only 1,306 residential condos on the Strip, Hiatt says. Sky Las Vegas has 42 units on the Multiple Listing Service, and Hiatt says Harmon buyers will look at those units along with Turnberry and Fontainebleau.
“These buyers want a lifestyle experience in the resort corridor, and they have few choices because they are not expected to build another condominium (on the Strip) for five to seven years,” Hiatt says. “Buyers are starting to realize that.”
Condo hotels don’t count because they are not geared for everyday living and projects in downtown Las Vegas or west of the Strip don’t offer the resort corridor lifestyle, he says. They want to have quick access to casinos, retail and other amenities such as spas, he says.
“They want to walk out their door and have multiple choices,” Hiatt says. “At CityCenter, you had the Bellagio and Paris.”
The other condominium projects in CityCenter are Mandarin Oriental and Veer. Mandarin Oriental’s condos, which are on top of its hotel, are virtually sold out while Veer doesn’t offer the high-end, hotel-type amenities of the Harmon, Hiatt says.
Steve Bottfeld, executive vice president of Marketing Solutions, says the elimination of the Harmon condos will be a positive for that market because it will push people to Sky, Allure or even Cosmopolitan.
Paul Murad, a real estate broker and author of “Manhattanizing Las Vegas,” says he wouldn’t be surprised if some buyers at the Harmon are happy with the cancellation because they were concerned about falling condominium prices and their ability to secure financing to close.
“I think it let some buyers off the hook,” Murad says. “It is good news for those who wanted to get out.”
The good news for condo buyers is that MGM Mirage is refunding their deposits as required, Hiatt says. That’s not always the case in this challenging environment, he says.
“Usually with most developers, it is not the easiest process,” Hiatt says. “You are fighting to get your money back. They (MGM) are a very professional organization in how they are handling this. They are stepping up and calling brokers.”
There has been a lot of disappointment in the real estate community because of the lost commissions not only at the Harmon but because of the credit crunch and economic slowdown that have prevented people from closing on other condo units in the valley, Hiatt says.
Many agents have been counting on closings at the Harmon for their income even though they should have been prepared, Hiatt says. CityCenter gave them partial commissions when contracts were signed in the 25 percent to 75 percent range, he says.
“I have gotten calls from agents who are nervous because their whole livelihood this year was based on selling CityCenter,” Hiatt says. “This makes it tough.”
Hiatt says Las Vegas will be paring down its agents in the condominium market this year and those who know how to handle sales of existing units will fare better than those who specialize in new construction.
“They will have to leave the business because there is no new construction to sell,” Hiatt says. “There is a huge learning curve, and it is definitely taking a toll on nonseasoned agents.”
Bob Hamrick, CityCenter’s broker, says those who lost out on the Harmon will be given opportunities to purchase not only in Veer and Mandarin Oriental, but in Vdara, the condo hotel tower at CityCenter.
Mandarin Oriental, which has 227 units, has only 15 penthouses remaining, Hamrick says.
More than 400 units have been sold at the 670-unit Veer, Hamrick says. It has smaller units than Harmon with sizes ranging from 500 to 3,000 square feet. Many of Harmon’s units were close to 1,000 square feet.
Eliminating 207 of the 2,700 units at CityCenter will increase the value of remaining units, Hamrick says.
Builders show hits Las Vegas
The International Builders Show will return to Las Vegas Tuesday through Friday at the Las Vegas Convention Center. The show had been in Orlando, Fla., for the past three years and will return to Las Vegas again in 2010. It drew about 100,000 people in Orlando.
With the slowdown in the economy and tourism, the convention is a boon to the area, says Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association.
“We are expecting a slightly smaller group coming in than in the past, but it ranks as one of the largest conventions that comes to Las Vegas,” Caruso says. “They bring family with them.”
The convention has served as a showcase for the homebuilding industry in Las Vegas in the past, Caruso says.
The industry trade show is a fellowship event for builders across the country and gives executives a chance to network. There are also many seminars where ideas are exchanged on new products, technology, marketing, government regulation and other developments such as green building.
It is not open to the public.
Former Notre Dame football coach Lou Holtz is the keynote speaker.
In other real estate news:
• NAI Global, a commercial real estate firm, has named Art Carll as senior vice president and leader of its newly formed investment services group in its Las Vegas office. In addition to his responsibilities with NAI Las Vegas, he will lead a regional effort of NAI’s Global accelerated marketing program. Carll had served as regional vice president of Prudential CRES, overseeing operations in Nevada and Arizona.
Brian Wargo covers real estate and development for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4011 or at [email protected].