Originally, MGM Mirage projected it would gross $2.7 billion, cash, by selling nearly 2,400 residential units: 227 luxury condos on the upper floors of the Mandarin Oriental, 670 residences in the twin Veer Towers, and 1,495 condo-hotel rooms in Vdara.
MGM claimed recently that buyers have reserved more than 1,300 units. This means that altogether, around 1,100 of the 2,400 units are still on the market. Reportedly, 220 of the 227 units at Mandarin Oriental are reserved. And roughly 450 of the 670 units at Veer have deposits on them.
The big trouble is at Vdara, where only 630 or so units of the nearly 1,500 are accounted for. According to local real-estate experts, "the condo-hotel concept is dead" and many people with deposits on units in Vdara are trying to transfer them over to Veer instead.
MGM Mirage has collected $300 million in deposits from buyers of CityCenter residences. In October, the company announced a 30% discount off the original prices negotiated during the height of the run-up of Las Vegas real estate. Buyers who take advantage of the price reduction cannot resell their units for a minimum of 18 months. So the boom prices have been reduced by nearly a third. Still, as you say and depending on circumstances, if people who put money down on units don’t or can’t complete the purchases, they could lose their deposits.
Mandarin residences are scheduled to close in January, Veer in February, and Vdara in March. It’ll be interesting to see how many units actually do close, given the limited loan options in this tight-credit environment. MGM Mirage is offering some short-term financing; it has also hired the Private National Mortgage Acceptance Company (PennyMac) to coordinate loan origination and servicing, plus secondary market activities, for the condos. PennyMac is run by executives of the failed Countrywide Financial.
