Brokerage hired to market Vegas Grand condos

Property includes residential building, 16 vacant land acres

May 26, 2008 - Lehman Bros., which recently gained control of the financially troubled Vegas Grand luxury condominium project near Flamingo Road and Swenson Street, has hired CB Richard Ellis, a commercial real estate brokerage, in Las Vegas to market the property.

Vegas Grand, originally developed by Orlando, Fla.-based Del American, has a 212-unit residential building, Bella Venezia I, near completion and 16 acres of vacant land. The site, zoned R-5 apartment residential (50 units an acre) with a mixed-use overlay, is approved for another 782 units.

The budgeted construction cost of Bella Venezia is about $78 million and the land was appraised at $4.55 million an acre, or $72.5 million, less than a year ago, CB First Vice President Geoffrey West said.

"What this really gives somebody is a clean slate," he said. "It was originally intended as a for-sale condominium project, but that market has all but disintegrated. This gives an opportunity to utilize it as luxury apartments, a nongaming hotel and resort or a time share. What it does is widen the range of possible uses and makes it more appealing."

Vegas Grand is close to the Strip, University of Nevada, Las Vegas, and the Las Vegas Convention Center. It's a "rarity" to find a contiguous 20-acre parcel in that area at less than $6 million to $7 million an acre, West said.

The call for offers has been extended to June 12.

The project has significant capital investment, more than $100 million in the building and land, as well as infrastructure for flood control, utilities and roadways.

When Chris DelGuidice of Del American bought the parcel from Nevada Power in 2003 for about $4 million, it was a convergence of both the Flamingo and Tropicana washes.

DelGuidice told the Review-Journal he's bringing a "new chapter of sumptuous living" to Las Vegas. He offered luxury condos starting in the $200,000s, but later canceled reservations and raised prices. That prompted a class action lawsuit that was settled in 2006 when the developer agreed to pay 2.5 percent of future gross sales into a common fund for 638 reservation holders.

Del American received $240 million in financing from Lehman Bros. and Hypo Real Estate Capital Corp. in 2004.

LAND PRICES:

The average price of land in Las Vegas fell to $678,091 an acre in February from $710,649 the previous month, CB Richard Ellis reported.

The price is based on 50 acres that sold for nearly $34 million in 15 separate transactions. That's down from 362 acres sold in 37 transactions in January. Eight of the transactions were residential properties, six were commercial and one was industrial.