Former Frontier Casino owner Phil Ruffin says "He's putting his money on Vegas." This is to the tune of $775 million to purchase Treasure Island from MGM Mirage. The deal is said to involve $500 million in cash, with the balance in secured notes. The transaction is expected to close around the 2nd. quarter 2009, pending regulatory approvals.
This gives MGM a liquidity boost in these difficult economic times. It's also a boost to City Center that is scheduled to open late 2009, as the credit markets having tightened, this inflow of cash gives them some breathing room. It also shows a substantial vote of confidence in Las Vegas, to have an investment like this with all the negativity still in the air.
Phil Ruffin sold the Frontier to ELAD Group in 2007, which then partnered with IDB Group to build a Las Vegas version of New York's Plaza Hotel on the site. The project has been delayed by a dispute over the Plaza name, which has since been settled, and of course by the tightening of the credit markets. Although delayed, it appears at the moment that they are proceeding with the development, and are asking for a second extension of time on their loans while they finish their preparations and obtain construction financing.
So where does the Canadian invasion of Las Vegas tie into all this? A number of ways, actually. First, they have been the dominant buyers of MGM's City Center condominiums. An article from the Calgary Herald earlier this year even quotes City Center's Toronto based residential division executive VP, Tony Dennis. "The dominant buyers are from Calgary and Edmonton because of the travel time
involved," he says. "Canadians, especially Western Canadians, have always liked Vegas. It's so
IDB Group, the 50% partner in the Las Vegas Plaza, has other investments here in Las Vegas. One of them is luxury condominiums of One Queensridge Place in Summerlin, and the surrounding development that includes the mixed use Tivoli Village. They have recently increased their investment in the project.
Frank Pankratz, a native of Saskatchewan, is the president of Executive Home Builders, the developer of Queensridge and IDB's partner. He too is quite optimistic on investing in the future of Las Vegas. A report in Ontario's National Post that describes his experience and views on the Las Vegas real estate market, titled Vegas Rising.
While not related to this group of developers and investors, just one more area where a substantial number of Canadians have purchased here in the Las Vegas Valley. I mentioned it in a past blog about Tuscany Village in Henderson. The golf course centered community has been a popular spot with our neighbors from the north.
It seems that many are finding Las Vegas an excellent investment opportunity these days. I'm sure Phil Ruffin feels that today's market opened an opportunity to purchase the TI at an exceptional price. For home buyers they may find the same. Recent analysis from National City finds Las Vegas homes 18.8% undervalued, with them suggesting that this presents opportunities to home buyers, but not 'flippers'.
Another article from the Las Vegas Review Journal suggests that Las Vegas home prices may be at or near bottom. It's based on local real estate sales data, and from Foreclosures.com. The president of the foreclosure tracking company sees a slowing of foreclosed properties in Las Vegas, and further stating that a recovery is underway, and they predict that buyers will be appearing in droves through 2009.
I find it good to see this strong interest, investment, and support of the potential in Las Vegas, especially when still in these unsettled economic times.
If you are interested in relocating to Las Vegas or would like information on Las Vegas real estate, please email me, Roberta LaRocca, at firstname.lastname@example.org, or call me at 702-354-8988. I look forward to hearing from you!