Although real estate promoters continue to wax poetic about the potential for condo hotels in Las Vegas, a major development at the Hard Rock appears headed for the rocks.
Last week, Hard Rock owner Peter Morton said the planned $1 billion condo-hotel expansion has been put on hold, presumably because there have been offers to purchase the rock-themed hotel-casino.
"While we pursue the possibility of this transaction, we put the project on hold," Morton said, adding that condo purchasers have been offered their money back, with interest.
The 1,200-unit expansion project includes a high-rise tower called The Residences, two smaller buildings called The Flats and 32 bungalows.
Along with the residential units, the expansion on 24 acres adjacent acres would include The Joint concert venue, a cluster of restaurants and a rooftop lounge.
The future of the expansion appears hinged to a potential buyer of the Hard Rock Hotel. Some experts speculate that the project is now effectively dead.
If so, it can be added to the growing list of condo/hotel projects that have pulled the plug after making grandiose announcements over the past 14 months.
In the past few months, dreamy named high-rise projects such as the Icon, Liberty Tower, Krystal Sands and Aqua Blue have gone by the wayside.
Ivana Trump backed out of her proposed Ivana Las Vegas Residential Condominiums. So did the Hilton family, when it scuttled The Conrad Majestic, a casino, restaurant and high-rise condo proposed on the site of the old La Concha Motel.
The problem, according to local real estate brokers, is a lack of understanding of the Las Vegas market, as well as escalating building costs. Some construction material costs are escalating about 15 percent to 25 percent a year.
Still, about 16 high-rise projects are currently under construction. Half are condo hotels and the others are condos.
"We believe about 20 percent of the announced projects will get built," said MGM Chairman and CEO Terry Lanni. "A lot of people misjudged the market; they priced the units before costing them out."