[jlawrence01]

Originally Posted by rrrafael

Calling all pocket protector owners.........

TIME Magazine reported that rooms at the City Center cost 1.5 million each to build. Let's determine how much they will need to charge/make to break even and avoid Bankruptcy. I hope this will be a thread that has a good learning curve and matures with time, as new and better information emerges. I didn't want to put it in the CC thread, because they are focused on the hiring process. This thread is about the viability of the place.
?

The Phoenician in Phoenix, built in the late eighties, had a break-even occupancy rate of 129% when it opened. When the second owners bought the property out of bankruptcy at roughly 0.25 on the dollar, their break-even was roughly 40-45%.

Agree that bankruptcy will solve a lot of the problems over time.

[rrrafael]

Good post. 129% occupancy? It seems like they would have to be a whorehouse to get that kind of occupancy. I wonder how a bankruptcy will affect the union employees. I've heard stories about airline maintenance people coming in and getting paid half for doing the EXACT same job, after a "reorganization." I don't know much about Labor Law, but it seems like they would always be trying to ditch the union. Things like using sub-contractors, and renting out spaces to restaurants, instead of using in-house employees. I used to wager at Gold River/ River Palms in Laughlin--it seemed like that place was in and out of Chapter 11 every few months.

[007 license to sell]

You should look at the video that another gent posted about steve wynn, he address's CityCenter it is worth looking at. When I first started selling condos in CC as a outside agent the project in 2007 .The MGM revised estimates of gross proceeds from the sale of residential units from $2.5 billion to $2.7 billion. It increased its projected net cost for the project from $4.3 billion to $4.7 billion. The revised cost figures exclude about $200 million in preopening expenses.

Then it ended up at a little over 8 billion it will be interesting to see how it turns out, it is really a cool project and a great addition to the strip. I just hope they didn't over build.

[jlawrence01]

Originally Posted by rrrafael

Good post. 129% occupancy? It seems like they would have to be a whorehouse to get that kind of occupancy. I wonder how a bankruptcy will affect the union employees. I've heard stories about airline maintenance people coming in and getting paid half for doing the EXACT same job, after a "reorganization." I don't know much about Labor Law, but it seems like they would always be trying to ditch the union.

The similarities between the mid-eighties and recent years is that a lot of commercial (and residential) properties were built more on optimism than on sound economics.

In general, bankruptcies can void or alter union contacts. New contracts are negotiated through the US Bankruptcy Court. In general, the wages paid are less. Do realize that EVERYBODY else - vendors, lessors, and lenders are also losing big time.

[olecapt]

Originally Posted by jlawrence01

The similarities between the mid-eighties and recent years is that a lot of commercial (and residential) properties were built more on optimism than on sound economics.

In general, bankruptcies can void or alter union contacts. New contracts are negotiated through the US Bankruptcy Court. In general, the wages paid are less. Do realize that EVERYBODY else - vendors, lessors, and lenders are also losing big time.

It is doubtful a strip property of stature could abrogate a union contract with the culinary and survive. Note too that the Union contracts may well be with the operating company that never, never goes bankrupt as opposed to the holding companies that own the operating companies. I wonder if an operating company can go bankrupt and operate...I think not.

Note that in Nevada you must meet both the financial laws and the rules of the gaiming commission at all times.