Recently there have been some major Israeli investors in the Las Vegas market. The most often heard mentioned is EL-AD Group with their purchase of the Frontier property on the Las Vegas Strip at a record price per acre, and it now being on hold until credit markets relax. There are others as well, including EL-AD's partner in the Plaza, Nochi Dankner's multi-billion dollar IDB Developments / Property and Building that is in for 50% of the estimated $8 billion project.
Dankner's investment in Las Vegas doesn't end there. They have recently refinanced and increased their stake in Queensridge in Summerlin, as well as the soon to be $850 million Tivoli Village mixed use project next door. The 700,000 square foot development will include retail and restaurant space, a 36,000 square foot 8 screen theater with reclining 'Lear jet style' seats, and 340 loft condo units similar to the District at Green Valley Ranch.
Another major player in Las Vegas is Africa Israel. They are the majority partner in the group that acquired the former Las Rambles / W Hotel site on Harmon. They have already received approvals for a new resort project on the site and are currently working on consolidating the parcels and vacations and abandonment of streets to accommodate their planned layout of the new design.
So how are these investments, in this media portrayed 'horrible' Las Vegas market, being viewed from their homeland of Israel? Analyst Shai Lipman of Tel Aviv-based IBI Investment House was quoted as saying he is unmoved by the crisis reports of Las Vegas. With that in mind he's given Dankner's Property & Building and Africa Israel Properties a buy rating. He also said that the planning for the Plaza project will be complete in 8 - 10 months, and the financial markets will be clearer by then. Strangely enough, the Plaza and Queensridge loans have been extended until next May.
I also was enlightened to an interesting interview of Segi Eitan, the CEO of Property and Building, in Israel's Hareetz. Some of the interesting highlights was the very favorable 6.3% interest rate they received for extending the Plaza loan, and she states it's affirming Goldman Sachs and Credit Suisse potential in the project. When asked if there were regrets on being in the Las Vegas market during this downturn, she replied "If you want to make money in life, you have to take risks. "There's no such thing as reward without risk. Looking backward is no great trick. I remain optimistic about the success of this project." In response to slowdowns in the luxury condo market that includes their Queensridge, she states that they aren't compromising in pricing because..."These are some of the best luxury apartments constructed in the city. When the storm passes, the apartments will go at the speed of a missile launch."
It would appear that in spite of all the gloom and doom heard from the media, there are those that still see the potential in Las Vegas' future and continue to invest in it, even from half a world away.
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