Strip speculators play ‘Let’s Make a Deal’

May 14, 2002 10:30 AM

Land sharks are circling the north end of the Strip, real estate experts say.

"We’ve had more inquiries in the last six weeks than we’ve had in the past six months,’’ CB Richard Ellis’ Carlton Geer said of the 25-acre lot at the southwest corner of Sahara and Las Vegas Boulevard.

Priced at $65 million, the vacant parcel comes cheap compared with land at the south end of the resort corridor ”” where dirt is running as much as $10 million an acre. A 77-acre swath across from Mandalay Bay is being shopped at $7-$8 million per acre.

And prices are going up.

In a deal announced last week, Silver City owner Luke Brugnara reportedly sold one-third of his 9-acre parcel to a commercial retailer for $31 million ”” effectively doubling his investment in a year.

"Anything along the monorail route looks good,’’ said Andy Gabriel, who handles commercial land transactions for the law firm of McDonald Carano. "It’s for real.’’

Geer and Gabriel will participate in an invitation-only panel discussion on gaming real estate Thursday at CB Richard Ellis’ Market Watch 2002 at the MGM Conference Center. Other panelists at the "Let’s Make a Deal" gathering include McDonald Carano gaming attorney Bud Hicks and Wells Fargo exec Jay Kornmayer.

"Sept. 11 and Indian gaming have posed challenges. And Reno is in worse shape (than Las Vegas),’’ said Hicks. "But the long-term outlook is strong. Even a $500 million Indian facility that’s a wild success in California won’t wipe out Las Vegas. They’re always running to catch up with Mecca.’’

Off the Strip, Hicks ”” who has represented Boyd, Bally’s, Coast and Herbst casinos ”” sees neighborhood gaming on the upswing. "Station is amazing. Local casinos are quietly setting their own standards,’’ he told GamingToday.

Kornmayer agrees that the industry’s long-term prospects here are "solid."

"Le Reve will be a catalyst. The expansion to total entertainment will continue to set Las Vegas apart,’’ he said.

Analysts say many landowners in the area are holding onto their assets short-term in expectation of big price run-ups ahead.

Meantime, both Kornmayer and Geer say financing remains a wild card. "A limited number of lending sources and expensive financing place further pressure on operating results,’’ Geer explains.

That, he adds, can extend escrow periods "during which problems may occur that derail the transaction.’’