Las Vegas Developer catches a second wind
It has been long, bumpy road for Lorenzo Doumani. The Las Vegas developer, who serves as CEO of Majestic Resorts, first announced plans for a new Conrad-branded condo-hotel at the northeast corner of Convention Center Drive and Las Vegas Boulevard South back in February 2004. The Conrad Majestic was originally supposed to open this year. Two and half years later, the 5.5-acre site is still vacant.
But that may soon change. Despite setbacks that include a lawsuit and a major redesign, the project is now moving ahead.
The $250 million Majestic Resort & Residences initially called for 378 hotel rooms run by Conrad Hotels, a Hilton brand, with 146 condominiums and a 100,000-square-foot retail complex. Yet the development quickly ran into a snag when the Related Cos. announced plans for a rival project next door. The $325 million, 514-unit "Icon Las Vegas" was to be a pair of 48-story, concrete-and-glass condominium towers.
Doumani filed a lawsuit against Related over obstructed views and emergency-vehicle easements. The two parties eventually settled out of court six months later, but the delay ultimately killed Related's project. "During the time it took to resolve the lawsuit, construction prices had increased so drastically that we were unable to build Icon based on its original pricing," Marty Burger, president of Related Las Vegas, at the time said.
RE-ENTER HILTON
Doumani's next obstacle came when Conrad Hotels was re-acquired by Hilton Hotels Corp. from London-based Hilton Group for $5.71 billion in late December. Meanwhile, construction costs rose 14 percent between 2004 and 2005, and housing sales softened. Shifting market conditions subsequently scuttled several high-rise projects, including: the Hard Rock Hotel's $1.4 billion, 1,420-unit Flats, Bungalows & Residences: Diversified Real Estate Concepts' 825-unit Aqua Blue; Related/Centra's $3 billion, 2,764-unit Las Ramblas; and Centex's $1 billion, 2,400-unit Urban Village, among others.
Last month, there were just 357 condo/townhome sales valleywide, 45.2 percent fewer than in 2005, reports the Greater Las Vegas Association of Realtors. Condo/townhome listings, however, skyrocketed to 6,261 units in October, which is 128 percent more than a year ago.
Doumani, as a result, has dramatically revamped his project plans. The 654-foot-tall tower will now have a 216-room Conrad hotel, 696 Conrad condo-hotel units and 76 Waldorf-Astoria-branded residences. There will be no casino. The condo-hotel units will range from 630 to 1,200 square feet in size, priced from $650,000 to $1.4 million.
WEEKEND AT THE WALDORF
The Waldorf-Astoria, a Hilton brand, is the famed Manhattan landmark where Cole Porter, Frank Sinatra, and the Duke and Duchess of Windsor were guests. This marks the first time that anyone will be able to purchase a Waldorf-Astoria residence.
The homes will be 2,000 to 5,000 square feet in size and occupy the tower's top 10 floors. Prices start at $2.8 million (or $1,400 per square foot) and run up to $10 million, or $2,000 per square foot. Christies Grand Estates is handling Waldorf-Astoria sales.
"At this point, I'm not worried about saturation," reported Doumani. "The condo-hotel market runs like the hotel market, as opposed to the housing market. And Las Vegas still has a 91 percent occupancy rate citywide."
Designed by Paul Steelman, the "Conrad Majestic Las Vegas" will feature a 2.5-acre, three-level pool deck, a 27,000-square-foot spa and health club, three restaurants, a nightclub, a business center and other amenities. However, the project is now estimated to cost $825 million -- 70 percent more than original budget, two and half years ago.
TIMING IS EVERYTHING
"It's perfect timing for this project to get back on track with Boyd Gaming's Echelon Place and Turnberry's Fontainebleau nearby," said Bruce Hiatt, owner of Luxury Realty Group, a Las Vegas residential-high-rise specialist. "There is still a 10 to 15 percent rise in construction costs taking place. So for every month the developer has to wait from reservation to groundbreaking, it becomes that much harder for the project to materialize."
Doumani expects to break ground in May 2006 and open by late 2009. Construction costs are estimated at over $350 per square foot. New York-based Bovis Lend Lease, the firm currently building the 428-unit Allure Las Vegas at Sahara Avenue and the Strip, has been named as general contractor.
Doumani's grandfather acquired the project site 50 years ago for $95,592 an acre. A similar property today could fetch up to $10 million per acre, almost 105 times more than initial purchase price.
"If you had to buy the dirt today and build it from scratch, you probably couldn't do it," Doumani observed. "We're in a unique situation. What Steve Wynn did for gaming, we're trying to do for non-gaming."
But that may soon change. Despite setbacks that include a lawsuit and a major redesign, the project is now moving ahead.
The $250 million Majestic Resort & Residences initially called for 378 hotel rooms run by Conrad Hotels, a Hilton brand, with 146 condominiums and a 100,000-square-foot retail complex. Yet the development quickly ran into a snag when the Related Cos. announced plans for a rival project next door. The $325 million, 514-unit "Icon Las Vegas" was to be a pair of 48-story, concrete-and-glass condominium towers.
Doumani filed a lawsuit against Related over obstructed views and emergency-vehicle easements. The two parties eventually settled out of court six months later, but the delay ultimately killed Related's project. "During the time it took to resolve the lawsuit, construction prices had increased so drastically that we were unable to build Icon based on its original pricing," Marty Burger, president of Related Las Vegas, at the time said.
RE-ENTER HILTON
Doumani's next obstacle came when Conrad Hotels was re-acquired by Hilton Hotels Corp. from London-based Hilton Group for $5.71 billion in late December. Meanwhile, construction costs rose 14 percent between 2004 and 2005, and housing sales softened. Shifting market conditions subsequently scuttled several high-rise projects, including: the Hard Rock Hotel's $1.4 billion, 1,420-unit Flats, Bungalows & Residences: Diversified Real Estate Concepts' 825-unit Aqua Blue; Related/Centra's $3 billion, 2,764-unit Las Ramblas; and Centex's $1 billion, 2,400-unit Urban Village, among others.
Last month, there were just 357 condo/townhome sales valleywide, 45.2 percent fewer than in 2005, reports the Greater Las Vegas Association of Realtors. Condo/townhome listings, however, skyrocketed to 6,261 units in October, which is 128 percent more than a year ago.
Doumani, as a result, has dramatically revamped his project plans. The 654-foot-tall tower will now have a 216-room Conrad hotel, 696 Conrad condo-hotel units and 76 Waldorf-Astoria-branded residences. There will be no casino. The condo-hotel units will range from 630 to 1,200 square feet in size, priced from $650,000 to $1.4 million.
WEEKEND AT THE WALDORF
The Waldorf-Astoria, a Hilton brand, is the famed Manhattan landmark where Cole Porter, Frank Sinatra, and the Duke and Duchess of Windsor were guests. This marks the first time that anyone will be able to purchase a Waldorf-Astoria residence.
The homes will be 2,000 to 5,000 square feet in size and occupy the tower's top 10 floors. Prices start at $2.8 million (or $1,400 per square foot) and run up to $10 million, or $2,000 per square foot. Christies Grand Estates is handling Waldorf-Astoria sales.
"At this point, I'm not worried about saturation," reported Doumani. "The condo-hotel market runs like the hotel market, as opposed to the housing market. And Las Vegas still has a 91 percent occupancy rate citywide."
Designed by Paul Steelman, the "Conrad Majestic Las Vegas" will feature a 2.5-acre, three-level pool deck, a 27,000-square-foot spa and health club, three restaurants, a nightclub, a business center and other amenities. However, the project is now estimated to cost $825 million -- 70 percent more than original budget, two and half years ago.
TIMING IS EVERYTHING
"It's perfect timing for this project to get back on track with Boyd Gaming's Echelon Place and Turnberry's Fontainebleau nearby," said Bruce Hiatt, owner of Luxury Realty Group, a Las Vegas residential-high-rise specialist. "There is still a 10 to 15 percent rise in construction costs taking place. So for every month the developer has to wait from reservation to groundbreaking, it becomes that much harder for the project to materialize."
Doumani expects to break ground in May 2006 and open by late 2009. Construction costs are estimated at over $350 per square foot. New York-based Bovis Lend Lease, the firm currently building the 428-unit Allure Las Vegas at Sahara Avenue and the Strip, has been named as general contractor.
Doumani's grandfather acquired the project site 50 years ago for $95,592 an acre. A similar property today could fetch up to $10 million per acre, almost 105 times more than initial purchase price.
"If you had to buy the dirt today and build it from scratch, you probably couldn't do it," Doumani observed. "We're in a unique situation. What Steve Wynn did for gaming, we're trying to do for non-gaming."
posted by New Condos at 4:59 AM
0 Comments:
Post a Comment
<< Home