Vegas Land Rush Continues as Vacant Strip Property Hits Market

July 18, 2007
By Eugene Gilligan, Senior Editor

A 38-acre parcel of land on the Las Vegas Strip is being marketed to large gaming and development companies for a mixed-use project, according to CB Richard Ellis Inc., which announced yesterday afternoon that it is marketing the site, along with Goldman, Sachs & Co.'s New York-based Gaming Group.

"This is the last opportunity for a development project on the Strip," said Michael Parks, vice president of CB Richard Ellis Inc., and a partner in the firm's global gaming group. Parks noted that El Ad Properties' purchase in May of the New Frontier Hotel, for $1.2 billion, sets per-acre prices on the Strip at approximately $35 million, but declined to speculate on what this parcel would sell for. But ever escalating values has meant that more than just casinos will likely be built on these parcels to justify the costs.

"Now, these sites contain large mixed-use developments that contain retail, entertainment venues, and, many times, residential properties," Parks said.
When Parks was asked if another mixed-use Strip development is one too many, he said the question of "how much is too much" has been asked for years in the city.

"When the Mirage opened in 1988, people said it was too big, it was too much," Parks said. "But Las Vegas continues to reinvent itself, and attract people."

The site is located directly east of Mandalay Bay Hotel Casino, and is likely to be the latest in a wave of big-ticket land acquisitions in Sin City.

On July 10, FX Luxury Realty L.L.C., an affiliate of CKX Inc., acquired full ownership of a 17.7-acre lot on Las Vegas Blvd. from Africa-Israel investments, paying $180 million in cash for the parcel. A spokesman for the firm said the company will likely build an Elvis Presley-themed development.

June also saw other big land transactions. Peebles Corp. bought Con AM Management Corp.'s 13-acre lot, located a half-mile from the Strip, for $65 million, to pave way for the Las Palmas Hotel & Residences, which Peebles said would be the city's largest non-gaming hotel.

Also in June, the Las Vegas Review-Journal reported that James Packer, Australia's richest man, had struck an agreement with the developer holding purchase options for the now-vacant Wet 'n Wild water park on the Strip. Packer said he would operate the Crown Las Vegas, which will contain 5,000 hotel rooms, 250,000 square feet of casino space, and 625,000 square feet of retail. The developer, Christopher Milam, entered into an option agreement in June of last year of $450 million with the parcel's owner, Archon Corp., for the 27-acre site, which has since risen to $475 million. Milam has said that Crown Las Vegas, on completion, will be 142 stories tall.

Not one to be left behind, MGM Mirage closed on the purchase of several parcels, totaling eight acres, from Concord Wilshire Acquisitions, for $131 million in May, and earlier that month closed on its $444 million acquisition of a 26-acre parcel from Gordon Gaming Group.

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