MGM Mirage is now planning to open the two-tower luxury complex - sitting in the middle of CityCenter and drawing admiring and sometimes quizzical looks with its two leaning towers - in May. It was scheduled to do so in mid-December when most of the mammoth multi-billion-dollar resort on the Strip began welcoming its first guests. The reason to the delay is quite clear. The current economic slump has deeply trimmed down the potential buyer pool for condos at Veer Towers. The same actually goes for all high-rise projects in Las Vegas.
Mortgage finance has been a problem all along. Lenders are staying away from Las Vegas luxury condo scene ever since the real estate market here stunningly caved in. To help move inventory MGM Mirage started offering seller financing in December but obviously its impact has been marginal at best. It also cut prices by 30% to ease buyer concerns about the continuous weakness on that front. Values throughout the condominium segment - from Florida and across to California - have been very leaky mostly due to rampant overbuilding. Las Vegas with its incomparable entertainment flavor didn't escape any of that either.
The recent housing bubble brought luxury condos to Las Vegas in a big way, on a firm developer bet that Vegas was now ripe enough for such a product. Most of them would be vacation homes for those yearning to scoot occasionally over to the desert oasis for some R & R. That's especially true for the Strip destinations. A trailblazer in this by many accounts was Turnberry Place that some locals had doubts about at first but then turned into a very successful project. Everybody and his nephew saw that and quickly wanted to cash in on the emerging trend. The stampede was on.
MGM Mirage joined it and is now struggling mightily with the condo product. Las Vegas high-rise condominium prices have seen much better days and 30% discount in them for Veer buyers is not near where the brutal real estate market forces say they actually are. It's difficult even for an in-house mortgage lender to underwrite a loan on a property with contract price and appraisal being miles apart. Without further price adjustments the many unsold units there will be hard to move anytime soon. Perhaps they should be used as hotel rooms for the time being, until the housing market picks up.