Las Vegas City Center condos sell in bulk for $119 million

, Daily Business Review

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The owners of CityCenter, an $8.5 billion Las Vegas Strip development that opened amid the city's real estate crash, said they sold 427 condominiums in a bulk transaction for $119 million.

The residences are at the 669-unit Veer Towers, built as part of CityCenter, a joint venture of MGM Resorts International and Dubai World's Infinity World Development Corp., they said Friday in a statement. The condos' buyer is Ladder Capital Finance Holdings LLLP, said Tony Dennis, executive vice president of CityCenter Residential. The CityCenter hotel, casino and condo complex opened in 2009.

"We built in the best of times and opened in the worst of times," Dennis said in a telephone interview. "We're seeing significant improvements in the market."

Investors have been buying homes to hold as rentals in Las Vegas and other cities hit by foreclosures, seeking to take advantage of low prices and demand for housing from people who can't buy because of damaged credit.

The median Las Vegas home price was $143,000 last month, up 24 percent from a year earlier, DataQuick reported Friday. They remain 54 percent below the November 2006 peak. Home sales in Las Vegas fell 7.7 percent from a year earlier as fewer properties priced less than $200,000 traded hands, the San Diego-based research firm said.

Ladder Capital, a New York-based commercial real estate finance company, plans to hold the units for as long as four years, selling them as the Las Vegas market recovers, he said.

Ladder Capital chief financial officer Marc Fox declined to comment on the deal.

'Sufficient Return'

The company probably plans to rent the condos out until prices recover, said Brian Gordon, principal with Applied Analysis, a Las Vegas-based real estate consulting company.

"The buyer clearly sees the opportunity to generate sufficient return during the hold period and ultimate resale," Gordon, who wasn't involved in the transaction, said in a telephone interview.

The condos sold for about $300 a square foot, more than other recent sales in the city and less than a third of their listing price before the towers opened, Gordon said.

The transaction joins other bulk purchases in the city. Blackstone Group LP's Hilton Worldwide, based in McLean, Virginia, bought 300 condos at the Trump International Hotel Las Vegas, New York-based Trump Organization said in September.

In addition to condos, CityCenter -- located on 67 acres (27 hectares) between the Bellagio and Monte Carlo casinos -- includes Aria, a 61-floor, 4,004-room gambling resort; a Mandarin Oriental hotel and residences; Vdara Hotel & Spa; and 500,000 square feet (46,000 square meters) of retail space.

Veer Towers are now 98 percent sold, with 11 penthouses remaining. The deal will allow CityCenter's owners to focus on the sale of the 160 remaining condos at the Mandarin Oriental, Dennis said.

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