MGM Mirage has confirmed that condominium prices at the Las Vegas CityCenter project it owns along with Dubai World, are to be cut – even for those investors who have already made offers.
The casino operator is reappraising the condos and talking to banks to help buyers arrange financing so they can complete purchases at the site, CEO Jim Murren told news agency Bloomberg in an interview late Friday.
”There’s no debate that the market has fallen dramatically in pricing since we initially priced these units,” Murren said. Customers are asking for ”a total marketing strategy for them, which includes financing,” he added.
MGM is building 2,400 condos at the $8.5 billion CityCenter project on the Las Vegas Strip.
Buyers who paid deposits have had trouble obtaining mortgages and many have balked at paying the agreed-to price, following a 53 percent crash in property values over the 18 months through May, according to the S&P/Case Shiller Single Family Home Price Index.
Murren also said MGM Mirage will overhaul its marketing and focus on convention bookings, intensifying competition with Sheldon Adelson’s Las Vegas Sands Corp., Harrah’s Entertainment Inc. and Wynn Resorts Ltd.
He expects a return to growth in Las Vegas in 2010, with a 10 percent increase in visitors following declines of 4.4 percent in 2008 and an estimated 7 percent this year.
MGM Mirage refinanced its debt and sold shares in May to remove the risk of bankruptcy. The company doesn’t expect to return to the capital markets until next year, Murren added.
CityCenter, a joint venture between MGM Mirage and state-owned Dubai World, includes hotels, casinos, shopping and residential projects connected to neighboring properties by a monorail. It is scheduled to open in December.
At CityCenter’s Veer Towers, 65 percent of the 670 condo units are under contract, and 45 percent of the 1,500 Vdara hotel-condo units are under contract, Bloomberg reported.
Buyers are asking CityCenter to re-price the units ”to reflect today and tomorrow’s reality,” and to qualify for bank loans, Murren said. ”We anticipate people being pleasantly surprised on our ability to close condominiums.”
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