Analyst: MGM Mirage Should Cut CityCenter Condo Prices In HALF

My Facebook friends may be aware that both Jon Ralston and I have unwisely tangled with a certain hysterical, ridiculous and flamboyant high-end real estate dealer who claims that the collapse of the Vegas condo market is all the media's fault. This extreme version of standard-issue scapegoating seems to arise from a theory that if the press only reported that everything was fine then, ergo, it would be thus. This gentleman does not believe that investors, residents, banks and buyers have nearly as much influence over the price of real estate as, say, Review-Journal real estate scribe Hubble Smith, and this morsel of "truth" is, to him, a major scandal. He keeps threatening to "go national" with this big cover-up -- these types always see the most illogical cover-ups, don't they? -- but generally he seems to be more likely to "go postal."

The motivation for journalists to singlehandedly destroy the economy, evidently, is that bad news increases newstand sales. Odd, that, since newspapers make very little off newsstand sales and most of their money on advertising and if people have no money they can't buy the stuff in the ads and the stores close and, well, the whole cycle is much too maddeningly, ruinously logical for this guy!

Alas, today the highly credible Bill Lerner of Union Gaming Group, which analyzes business trends using -- gasp! -- market data, came out with a new report. And it's all pretty bad news. Like this: "Quite simply, sales have been almost non-existent." And "We note that condo-hotel projects are seeing fewer than four units close each month, while condo projects fare even worse at fewer than two units per month."

Oh, and this: "Our data would suggest that MGM needs to cut pricing as much as 50% (or even more) in order to close units at CityCenter." (He does go on to say that they could probably get away with slicing the price 30 percent.)

Yowza. Actual data. I can't find a place to link to the report online, but it's 23 incredibly depressing pages that ought to come with a dose of cherry arsenic or a shotgun or a syringe of propofol or something.

Does the aforementioned real estate agent suggest journalists not report this stuff? Probably. If we do, that's a scandal!

Exclusive: CityCenter Pix

Yesterday, after I visited the uber-posh $30 million Project CityCenter sales office to get a better understanding of just what MGM Mirage is doing with its 76 acres between the Monte Carlo and Bellagio, I went to the top of the Bellagio's employee parking lot because I'd been told it's the best perch to shoot some pix of the project in progress. As you can see to your here, I'd heard right.

What you see at top left (may need to click to expand for detail) is that the building sprouting to the left is Vdara Condo Hotel, a 50-story curved building with 1,543 units ranging from 500 to 1850 square feet, and to the right in that shot is the 4,000-room CityCenter Casino-Resort, although they keep toying with the name of the place. The other pix here show each project separately, Vdara on the right and the hotel on the left.

In addition to those buildings, CityCenter also will include a pair of yellow twin condo towers called Veer, the aqua oval-shaped The Harmon Hotel & Residences and a Mandarin Oriental with a couple hundred condo units built in as well. A shot of the entire model is to the right, as it will be seen from the Strip, with the Vdara in the back to the right and the construction photos taken from behind that. All of this is to be completed by 2009.

While at the sales center, I happened to observe a salesman giving a pitch to what I think was a group of real estate agents. He made a really interesting point I'd never thought of, namely that the project costs $7 billion and one reason why they have all this condo inventory is because they can raise about $3 billion that way. What's so interesting about that is the sea change it represents; Vegas casino interests became public companies in the 1980s and 1990s in part to get financing for these mega-resorts. Now even that capital isn't enough; everyone's got to have condos, too, to offset the price, from Trump to Echelon to CityCenter to the Palms.

The sales guy also revealed some interesting tidbits about what Wet Design, creators of the Bellagio Fountains, are planning for "water features" at CityCenter Wassitcallt. Apparently, and he was vague mainly because he found it difficult to describe, there will be some sort of eye-popping show in the 500,000-square-foot mall of the hotel that involves mammoth ice sculptures rising from the ground, doing some sort of performance and then receding to re-freeze. Or something like that.

The sales center, which anyone can visit, has a little bar where soft drinks and snacks are free. And there are large models of each of the condo buildings (except The Harmon, which isn't done apparently) as well as models of what the rooms will look like. So to your right you'll see what the mock-up living room (complete with a fake Strip view) of the Vdara studio apartments (starting at $500,000) would look like. And to your left is what the bathrooms of the Mandarin Oriental units (which are sold out despite costing $1.5 million to $10 million) will look like. I liked the faucet spouts the most.

So today I'm sharing the serious pix. Tomorrow, I have some pretty funny ones, so come on back.

Breaking: Trump adding second Vegas tower

Just got word that on tonight's episode of NBC's "The Apprentice," The Donald announces he's building a second, twin tower, northeast of the existing 64-story golden glass tower that is almost completed and is sold out. The first tower of the Trump International Hotel & Tower Las Vegas sold out in three weeks.

It's already on the TrumpLV.Com website, complete with a rendering of the two towers together. Units will start in the mid-$600,000s.

Too bad about the gold-glass thing. It looks so garish.