From Wall Street Journal: MGM Mirage is cutting the price of the condos at its eight and half billion $ City Center development by 30% due to the economic downturn.
…MGM Mirage had hoped to sell its condos at top-of-the-market prices, which would have brought in $2.6 billion. However, it ended up getting deposits on only a portion of the inventory. If all of those deposits were to result in sales, it would mean $1.6 billion in revenue.
For such a high profile condo project publically announcing that they have lowered the prices of their condos by 30% demonstrates that even top of the line properties, in the center of the Las Vegas strip, properties that you'd expect would be in high demand, are having to take drastic steps to ensure that those who have placed deposits can close – and hopefully encouraging those who are on the sidelines to jump in.
MGM Mirage's decision will weigh heavily on the Cosmopolitan, a project whose development started before City Center, and will definitely end after City Center is up and running. Hopefully for all those who have placed deposits at the Cosmopolitan, they will be relieved to hear that price reductions will be coming down the line – if that ends up not occurring, the Cosmopolitan developers will have a much more difficult time closing than they ever expected.
I'm really glad that MGM Mirage has taken this step – it will help soothe the nerves of those who are looking to close, but are unable to because of financing, and hopefully put a little bit of a jump start into the economy.
I wonder how long it will take to see more of these deals come down the line.
email@example.comAndrew Calvo is a Commercial Real Estate Advisor in New Jersey who lives in Tinton Falls, NJ.
This blog is about my passions - primarily hotels, commercial real estate, and development, etc.
Since I have been in High School I've had numerous jobs, but the field which has always interested me is Real Estate, Hotel Development and Construction. I consider myself a zealot in that area - I try to absorb as much as I possibly can, take the experiences that I learn, or read about and use them in my life.