The Allure high rise condo project is putting 10 of their units up for auction at 1:00pm on Saturday, hoping that a successful auction will set an industry standard for similar high rise condo dogs such as Trump, Streamline Tower, Turnberry Towers, and Palms Place.
The units being auctioned are from original buyers who chose to walk away from their deposits rather than close, hence allowing for the "bargain basement" type price environment an auction usually promises, but many times does not deliver since "bid-frenzy" usually causes an eventual over-bidding of value - whatever that "value" actually is, as no one can tell what the value of an Allure unit should be.
Alan Schactman, senior vice president for Chicago-based developer Fifield Cos. (the developers of Allure) said the 427-unit Allure is about 50 percent sold. I don't believe it. I also don't believe his statement that "This (auction) is a one-time deal. I do not anticipate another auction. The market is picking up. I think after this auction, we're probably going to raise prices."
With statements like that, you know you're being taken to the cleaners. (remember those famous lines: "I'm from the government - I'm here to help you" and "The check's in the mail"... or "Of course I'll respect you in the morning")
The sad fact is the high rise market is not picking up. And you'll probably be able to pick up an Allure unit in the future at way less than you'll get at an auction. What really scares me about so many failed high rise condo projects that are trying to close unit sales is the total ommission of those 3 hated letters: HOA.
Does anyone consider what their Home Owners Association fees will be when they purchase a high rise condo? If all the units are sold and people are living in the building and all is fine in wonderland, HOA fees are stable and affordable. But what if that's not the case? Your HOA fees can skyrocket and I'll guarantee you that you'll wish you skipped the auction and invested in recession resistant opportunities instead.
The Las Vegas Convention and Visitors Authority just approved a new three-year advertising and marketing deal with R&R Partners, creators of the "What happens here, stays here" advertising slogan.
Now I will give you that "What happens here, stays here" is probably one of the most successful marketing campaigns in the history of advertising, but I'm a little confused that R&R Partners won the contract without an open bidding process. We're talking $400 million dollars in spending by the authority over the past 5 years. Shouldn't other agencies at least have a shot at that kind of prize, especially since every other advertising campaign they've utilized since their homerun slogan have been total failures?
According to Rossi Ralenkotter, president and CEO of the Convention Authority, "We don't have the time to do on-the-job training for another agency"... Sounds suspicious. (kickback perhaps?).
We're in a very crucial period of time for Las Vegas and the nation in general. There's outrage all around with how large companies are being bailed out only to see the funds (that we pay for in taxes) get used for bonuses, vacations, and junkets for the very executives who got us into this problem to begin with. Meanwhile, many Las Vegas high rise condo buyers are stuck with horrible purchases, debt that will never go away, and thinking that walking away from substantial deposits is their best option in this market. Where's the Las Vegas high rise condo bailout?!?!
This competition-free, inner circle friendly, "nobody will notice" type deal with the LVCVA is just another story that makes me sick on how companies spend money and award contracts. Let's hope R&R lives up to their end of the bargain and comes up with something that'll get people to visit, spend, invest, and maybe even relocate to the Vegas area again - otherwise there's no hope that the Las Vegas real estate market will recover in a timeframe that will make the CityCenters of the world happy.
In a move that may signify an emerging trend in the Las Vegas high rise condo marketplace, Prudential Financial now controls the Turnberry Towers high rise project after buying its outstanding debt from their lenders. While Turnberry Associates is still in the picture, Prudential has bought the undisclosed amount of debt from Bank of America and as such, Prudential is now the partner that'll make all the decisions.
This move effects mainly the west tower, recently completed last year, yet struggling mightily to sell units, as almost 50% remain unsold while a significant number that have closed remain vacant. In this recessionary economy, prices sought by Turnberry for their units are still extravagant and apparently more pain is necessary before they realize their overpriced nature.
Now that Turnberry has been "bailed out" so to speak, will we see similar projects take this route as well? Only if they're lucky. Industry "experts" - and you know how we feel about experts, especially in this environment - say Prudential got a good deal and basically picked up real estate at a highly discounted price. Said attorney David LeGrand:
"In this economic environment, it makes sense to improve your financial portfolio at a discount if you have the money."
If you have the money... oh, that's a good one! Does he think everyone is an accredited investor?
I'd like to summarize an interesting article someone just emailed to me. Here's a timeline for the anatomy of the real estate mess we find ourselves in as a nation:
Sounds about right. Backed up by 500 years of economic history, the timeline applies pretty well to the current real estate bubble. In fact, 4 main stages can then be identified:
1) The Stealth Phase: With better access to information and a higher capacity to understand it, this is where the "smart money" gets in, often quietly and cautiously. As prices gradually increase, larger positions are established as the "smart money" insiders realize that the fundamentals are sound and they have a winner on their hands. The general population has no idea what's happening at this point.
2) The Awareness Phase: This is when investors start to figure it out and bring additional money that push prices higher and higher. You also see short-lived selling off periods as the "smart money" people cash in on their first profits and during each of these "sell offs", the smart money people take these opportunities to fortify their portfolios. They do this until the media gets involved and brainwashes the general public that they're just as sophisticated as the "smart money" group - which they're not and never will be.
3) The Mania Phase: Thanks to the lack of an unbiased opinions in the media, everyone seems to be making money in an "investment deal of a lifetime". Getting into the deal is a "no brainer" and future price increases are "guaranteed", which of course goes against all the laws of supply and demand. Money from all avenues gets pumped into the deal, often from those who can't afford to do so, as the "smart money" people are gradually pulling out and selling to these nouveau "sophisticated" investors. People see enormous paper profits and greed sets in, so everyone starts to use debt and leverage to bid up prices and jump into the deal, despite their lack of knowledge of market dynamics and fundamentals. The bubble is at its breaking point.
4) The Blow Off Stage: This happens when someone finally "gets it" and convinces everyone else at the same time that the situation has changed, often resulting in the classic "reality check". Many will try to reassure the public that it's just a temporary set back and that the naysayers don't know what they're talking about. The house of cards collapses and the late comers to the party (a.k.a. - the general public) are left with the bag while the original "smart money" has pulled out a long time ago. Prices plummet, over leveraged investors go bankrupt, people are afraid of making any types of investments, eventually resulting in a totally depressed market which many then consider "a significant buying opportunity". The problem now is that thanks to the media and the constant biased opinions they face each day, the general public now thinks of this opportunity as "the worst possible investment" which allows the "smart money" to once again acquire assets at bargain bottom prices.
The bottom line is if you've arrived late to the dance with the hope of getting something for nothing, bubbles can be very damaging. It helps to be in the "smart money" class. If you're not - and you know who you are - visit this website and register today
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