Black Stone Invests Heavily in Las Vegas – Hottest Real Estate Market in the Country

The Las Vegas real estate market is as hot as the desert heat.

Las Vegas home values reported the highest year-over-year gains in home values, totaling a 13 percent increase, according to the S&P’s Corelogic Case-Shiller Index (the leading measure of U.S. home prices).

“The Vegas market is growing very quickly,” the founder of Oasis Global Al Lo said. “We’ve got a lot of new businesses, we have 3 new casino projects being built, we have a stadium coming along, we have a medical school that just started in Las Vegas, so there are a lot of people moving to Las Vegas and a lot of money coming to Las Vegas.”

The Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, David M. Blitzer, credits the same thing for the market boom. “Home prices continue to rise across the U.S.,” Blitzer said in a press release. “However, even as home prices keep climbing, we are seeing signs that growth is easing in the housing market.”

The Managing Director of Oasis Global Elaine Liu believes the real estate market is currently in a very healthy state.

“The real estate market here is really healthy right now. It took a while to get there, but we’re there and it’s exciting,” she said. “The landscape of the city is changing with us becoming a sports city if you will, and there’s a lot of investors buying these properties, so the competition is becoming fiercer. The strength and growth opportunity of the real estate market here is backed by various large scaled property investments, noticeably led by Black Stone”

Let’s take a look at the top 10 biggest real estate deals in Las Vegas last year.

People walk past the unfinished Fontainebleau project on the Vegas Strip, Wednesday, Dec. 13, 2017. (Richard Brian Las Vegas Review-Journal @vegasphotograph)

中文-ENGLISH (Via: Las Vegas Review Journal)

1. Fontainebleau

The unfinished Fontainebleau has been towering above the Strip since the recession, a constant reminder of Las Vegas’ real estate boom and bust.

Locals have wondered for years about its future. Then, in August, New York developer Steve Witkoff and Miami investment firm New Valley bought the stalled hotel for $600 million.

The seller, billionaire Carl Icahn, had acquired it out of bankruptcy in 2010 for around $150 million and left it largely untouched.

The buyers have not said what they will do with the blue-tinted property, but they’ve taken steps to resume construction and have a new name for the undertaking: Project Blue.

Wynn Resorts will purchase approximately 38 acres of the site of the former New Frontier, formerly the Alon Resort site, on the Las Vegas Strip. (Bizuayehu Tesfaye Las Vegas Review-Journal @bizutesfaye)

2. Alon site

Casino developer Steve Wynn laid another big bet on the Strip in December, reaching a deal to acquire about 38 acres of land next to Fashion Show mall for $336 million.

The sale, expected to close in the first quarter, largely comprises the former New Frontier site.

In 2007, Israeli investors bought and imploded that hotel with plans for a luxury resort, but the economy crashed and they never built it.

Australian billionaire James Packer’s company, Crown Resorts, acquired the site through foreclosure in 2014. His group filed plans for the 1,100-room Alon Las Vegas, but Packer reportedly had trouble raising project funds, and Crown bailed on the project late last year.

The scene at the Raiders stadium site in Las Vegas, Tuesday, Dec. 12, 2017. Erik Verduzco Las Vegas Review-Journal @Erik_Verduzco

3. Raiders land

With the Oakland Raiders moving to Las Vegas, the football team bought 63 acres at Russell Road and Dean Martin Drive for its new stadium, acquiring the land in May for $77.5 million.

The Raiders broke ground on their $1.9 billion domed stadium – a project backed by $750 million in public funds – in November.

Since the 1970s, other projects pitched for the site include a 1,000-space travel trailer park, two eight-story hotels, a high-speed-train station, a three-stadium sports complex and a 2 million-square-foot fashion expo center.

Las Vegas Market at World Market Center patio on Tuesday, Aug. 1, 2017, in Las Vegas. Morgan Lieberman Las Vegas Review-Journal

4. World Market Center

The Blackstone Group, an investment giant that’s been buying Las Vegas real estate for several years, picked up a massive property in 2017: downtown’s World Market Center.

The furniture-showroom hall, on Grand Central Parkway at Bonneville Avenue, spans 5.4 million square feet.

New York-based Blackstone acquired International Market Centers, which owned and operated the property as well as 6.8 million square feet of showroom space in North Carolina.

The purchase, for an undisclosed sum, closed in September.

5. Town Square

Town Square Las Vegas changed hands in January, a new chapter for a project that overcame litigation and financial woes after the economy tanked.

New York investment firm TIAA and Chicago’s Fairbourne Partners acquired the roughly 100-acre retail and office complex at Las Vegas Boulevard and Sunset Road, south of the Strip.

The buyers did not announce the purchase price, but records show they obtained a $215.6 million mortgage.

Town Square opened in 2007 but was seized through foreclosure in 2011.

The back of the Elysian West apartment complex, located at the intersection of South Jerry Tarkanian Way and West Hacienda Avenue in Las Vegas, Wednesday, Aug. 2, 2017. (Gabriella Angotti-Jones/Las Vegas Review-Journal) @gabriellaangojo

6. Elysian West

Las Vegas’ heated apartment market is showing no signs of slamming on the brakes. Case in point: The Blackstone Group bought the 466-unit Elysian West for $106.5 million in July.

The southwest valley complex opened last year and was 96 percent occupied at the time of sale.

According to the seller, Blackstone paid a record overall price and, at the time, record price-per-unit for a typical “garden-style” apartment complex in Las Vegas. Such properties might span 15 to 20 acres with several buildings.

7. The Gramercy

ManhattanWest, a mixed-use project on Russell Road near the 215 Beltway, was one of many abandoned, partially built projects that blighted Las Vegas after the economy crashed.

But investors bought it in 2013 at a steep discount, renamed it The Gramercy, finished construction and signed apartment and commercial tenants, imploding its stalled condo tower along the way.

In April, they sold its two office and retail buildings for $61.75 million to The Koll Co. and Estein USA. The buildings were said to be 98 percent leased at the time.

8. Panda Express

The billionaire founders of Chinese fast-food chain Panda Express bought four office buildings in Summerlin.

Andrew and Peggy Cherng, co-CEOs of Panda Restaurant Group, bought the 210,000-square-foot complex in September for $47.9 million.

The deal seemed random – Panda Express? – but came as Las Vegas’ office market, while still wobbly from the recession, keeps recovering.

9. Las Vegas Boulevard apartments

Several miles south of the Strip, near the M Resort, Las Vegas Boulevard is a lonely place with vast stretches of desert. Big parcels are for sale, and buyers are largely ignoring them.

One exception: Silicon Valley investor group WTI Inc. bought 46.6 acres at Las Vegas Boulevard at Chartan Avenue in July for $24.5 million.

Clark County commissioners in June approved its plans for a 30-acre, 754-unit apartment complex. The group also laid out plans for retail and other commercial uses.

Investors have bought the Smith & Wollensky building on the Las Vegas Strip for $59.5 million. Bizuayehu Tesfaye Las Vegas Review-Journal @bizutesfayeLas

10. Smith & Wollensky building

Owners of Showcase Mall on the Strip bought a building next door and drew up plans to tear it down for expansion space.

The Nakash family, founders of Jordache jeans, and New York investment firm Gindi Capital bought the Smith & Wollensky building in May for $59.5 million.

According to county documents, they plan to demolish it and construct a four-story, 145,000-square-foot building, expanding Showcase to about 481,400 square feet.

Clark County commissioners approved project plans in September.