Just as most experts agreed, the cost to build luxury condominiums on the Las Vegas Strip would have to increase because of land prices and construction costs, putting that much more emphasis on prime-location properties. Case and point? What was once thought to be a $6 billion or so development, MGM MIRAGE recently announced that the total cost to build its CityCenter project has now increased to over $9 billion.
The first time that MGM MIRAGE announced that the cost for CityCenter had risen was when the gaming and hospitality giant announced that the property had reached a total cost of $8.4 billion. With this second announcement, it will be interesting to see if this is where the numbers stay. Might as well go for $10 billion!
Regardless, this latest announcement tells quite the tale of what’s happening in the prime Strip. Building eco-friendly, multi-billion-dollar resorts which feature high-rise condos and penthouses is much easier said then done.
If MGM MIRAGE bought the CityCenter land today…
Everyone knows that MGM MIRAGE has owned the parcel of land under CityCenter for a long long time. With ELAD Properties paying $34 million an acre for the land under The Frontier (in order to build The Plaza Hotel Las Vegas), what do you think MGM MIRAGE would have had to charge for condos at CityCenter if they paid that price or more? How much more valuable is the land under CityCenter than it is under The Frontier?
If MGM MIRAGE knew CityCenter was going to cost $2 billion more than planned…
Would they have had to reconsider what they were charging for luxury high-rise condominiums located on the property?
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Aaron Auxier, REALTOR®, ABR can be reached at 702-205-1818.
“Hollywood’s Connection to Vegas”™
Luxury Realty Group is consistently quoted by the national press; making television appearances on CNBC, FOX News, ABC News, and CBS News as well as sharing their expert opinions with print publications such as Fortune, Forbes, Wall Street Journal, New York Times, and Los Angeles Times.
Copyright © 2008 Aaron Auxier. All Rights Reserved.
Disclaimer: All information in this post is subject to change without notice. Subject matter is not guaranteed and is often considered time-sensitive.
