Best article on Las Vegas Hi-Rises -State of the Market Aug 2,2009 (for sale, real estate)
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This really covers it all- I generally prefer the Sun to the Review Journal but this is comprehensive.
"The fireworks have fizzled now, though.
As some analysts predicted, less than 25 percent of the proposed high-rise projects have been completed. The cancellation list started with Krystal Sands and grew with Aqua Blue, Ivana Las Vegas, Las Ramblas, Icon, Spanish View, Sandhurst and Club Renaissance, to name a few high-profile failures.
Projects that did get built are having trouble selling. Newport Lofts and One Las Vegas entered foreclosure. Streamline Tower filed for bankruptcy. Trump Tower, with about one-fourth of its 1,282 units sold, is entangled in lawsuits. Overall, only 38 percent of the units that were completed are sold."
Just an exerpt.
This is one market that will go way lower- by the end of 2010 or sometime in 2011 there could be real bargains- but not yet.
That article is pretty good, I have been involved with the highrise market since 2004 and I had been very skeptical of allot of the builders claims. I think it was a great idea that went amuck and caused this problem. Like new home builders that over built in master planned communities, it will be interesting to see how this all turns out. Even MGM is having their condo's reappraised to lower their prices, they have finally come to their senses there is only so many people that will pay or can afford to pay for a highrise condo.
It's a nice alternative to sfh if you can afford it and realize that is will be a different life style than living in a sfh.
New home builders are also seeing the appraisals coming in form 10 to 20% lower than the agreed upon prices and I have also seen resale appraisals coming in allot lower as well so until the foreclosure market is corrected it will be interesting to see how this all pans out.
Prices could fall more, everyone is waiting to see what happens once citycenter opens how Vdara is going to effect the room rates as well as more rooms available at Aria. It could drive room rates down even more which would make owning a condotel even less desirable.
Here is some info on what to expect when owning a unit at Platinum.
This could have changed but there were some pretty strick usage rules at Platinum for owners and owners can be charged usuage points if they decide to stay in their condo during peak times like New Years or For units that are rented, one point will be assigned for each dollar of room revenue collected. Each unit within each room type will be rotated to fairly allocate the points accumulated for each room within that category. Each night of owner usage will count for one (1) usage night, with the exception of owner usage (a) on a Peak Demand Night, which will count for three (3) usage nights per night of owner stay, or (b) if the hotel occupancy for that night exceeds 95%, in which case the owner will be assessed points . Peak Demand Nights: The following events/holidays have been designated as Peak Demand Night periods and as such will require the unit owner to utilize three (3) owner usage nights (of the 60 available) for each night: New Year’s Eve, Superbowl, Final Four, Memorial Day, Fourth of July, Presidents’ Day, and the Kentucky Derby. These events/holidays are subject to change based on market conditions; however, the number of events/holidays (7) will not increase. If an owner stayed two (2) nights during every Peak Demand Night period, the owner usage nights accumulated would be calculated as follows, leaving 18 owner usage nights available for the remainder of the year.
7 Peak Demand Nights x 2 nights of Stay x 3 Owner Usage Nights= 42 Owner Usage Nights. Housekeeping Fees: Any owner use will be subject to the housekeeping fees as outlined in the exhibits to the Rental Agreement.
I do know that you can use an outside property management company to rent out the unit for you.
but here some info on what the rental guidelines were unless they have changed them. [SIZE=3] [/SIZE]
[SIZE=3]SOLITAIRE – One bedroom sleeps 4 [/SIZE]
[SIZE=3] 911 SQ FT (includes balcony)[/SIZE]
[SIZE=3] Association fee-$357/month[/SIZE] [SIZE=3] [/SIZE]
[SIZE=3]PRINCESS - One bedroom sleeps 4[/SIZE]
[SIZE=3] 1083 SQ FT (includes balcony)[/SIZE]
[SIZE=3] Association fee-$455/month[/SIZE] [SIZE=3] [/SIZE]
[SIZE=3]MARQUIS- Two bedroom sleeps 6[/SIZE]
[SIZE=3] 2410 sq ft (includes balcony)[/SIZE]
[SIZE=3] Association fee-$978/month[/SIZE]
[SIZE=3]*Association fee includes- water, sewer, garbage, cable TV, high speed internet, phone line, and condominium hotel insurance[/SIZE]
[SIZE=3]*The rental program split is 50/50 for the nightly revenue this could have changed.[/SIZE]
[SIZE=3]*The computerized rental rotation is calculated by location and condo style[/SIZE]
[SIZE=3]*Rental program accounting is done on a monthly basis[/SIZE]
[SIZE=3]*Platinum rental agreement allows the condo owner to stay up to 60 days per year, no more than 29 consecutive days (additional usage days are allowed but will be charged against owner rotation)[/SIZE]
[SIZE=3]* For those choosing not to participate in the rental program there is an additional $750/month fee[/SIZE]
[SIZE=3]*The maid service exit fee is $50/one bedroom- $75/2 bedroom and is charged to the owner at the end of each stay[/SIZE]
[SIZE=3]*Spa, banquet facilities, and food/beverage items are offered at a discounted rate to Platinum owners[/SIZE]
[SIZE=3]as for other condotel properties they all have their own restrictions and rules. It's not cheep owning an condotel and it's not a money making proposition . It's strictly a convience factor for the owner to have to stay when in town if you come to vegas alot it's nice. but it's something that should be thought hard about before purchasing.[/SIZE]
I see Platinum Units now listed for $89- 99k but there are few realtors listing units at $200k - same size same view- its a really inefficient market and those agents selling the high priced units never respond to what makes their unit so "Special". I like the Platinum condos as a place to stay, but with 50 of the units for sale and almost every single unit in the building under water- they will continue to get cheaper.
The high rise condo market in Las Vegas was all hype... When you think about high rises in real markets such as New York, Chicago, Philadelphia, Boston, etc... local entertainment/restaurants are literally steps from the front door.
In Las Vegas.. ones that are close to entertainment/restaurants are located in La-La Land... an area rarely visited by the actual residents of Las Vegas and more populated by people who like to come into town and act nothing like they would act at home...
Coming from Chicago... when I first saw where they were going up and the pretentious sales and marketing... I clearly thought at that time that they just don't get it... and to this day...they still just don't get it.
My dorm in college had more character...
Don't get me wrong... I love the strip.. I would just never LIVE anywhere near the strip.
Planning was an absolute FAILURE of what could have been done when everybody was throwing around money for development.
My forecast... prices half off within a year. There is already such a glut of empty units and more to come..
Nice article by the way... It gave me a good laugh remembering all of the hype from reps / agents with no clue about real high rise living... and developers who had no clue about Las Vegas.
You misunderstand the intent. They were never aimed at locals. There are some high rises that were..One Queensridge being the primary example..and they to have troubles though not on the level of the strip places.
The initial vehicles did well. Then it took off and it appears to be that the actulal market is a lot smaller than was thought. Greed is its own reward.
I would think though that, for the very well heeled visitor, City Center is about as convenient a Vegas place as one could have.
There are also some indications that the MGM Signature places will actually sell for $300 psf. I find that amazing but it appears true.
So never say never....
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