A decade after the Hollywood-backed Las Ramblas resort was conceived, it has gone on the market, listed for sale through brokerage CBRE Las Vegas. George Clooney and partners envisioned a massive integrated resort spread out over 25 acres, featuring gambling, condominium and hotel space, just east of, coincidentally, Planet Hollywood.
Las Ramblas was billed as a resort that would “transform the Las Vegas skyline,” featuring designs from Brad Pitt and George Clooney, a 30,000-square-foot spa, retail space, bars and loungers. The shovels were expected to hit the dirt in the middle of 2006, but the project was scrapped in June 2006. With high costs of construction, and poor sales of condos, the developers sold their parcel to Edge Group.
Edge had plans for an adjacent W Las Vegas condo-hotel project, which never took off, nor did an 11-acre parcel to feature 1,000 residential units, grocery store and retail district. Michael Parks, first vice president of investment properties for CBRE’s Global Gaming Group, calls the land a “blank canvas which to create something that would be special worldwide.”
Africa Israel Group led a joint venture in 2007 which bought up all three parcels for $625 million. The plan was to build the world’s largest hotel, with 6,745 rooms, but defaulted on the loans just eight months after. Harko LLC bought the parcel this January at a foreclosure auction for just $150 million, which shows $432.6 million of unpaid debt on the property.
Brokers feel the Las Ramblas parcel could command $3.5 million per acre. That price will allow for Harko LLC to recoup $212.8 million of the parcel’s unpaid debt. “The window is perhaps closing. They could maybe get a little more for it if they wait, but the cost of borrowing is going up if interest rates go up,” Chris Jones, managing director and head of equity research in North America for Union Gaming Group, said.
It is still unknown whether or not the Las Rambles land will be swooped up by developer who sits on it as a speculative property, and sell it later. One major issue is the current development in Las Vegas, which features Resorts World Las Vegas, and the future Crown Resorts Ltd. and Oaktree Capital Management project.
Brian Gordon, a principal in research firm Applied Analysis, said it will be years before the resort corridor is in need of more development. This isn’t exactly what the initial investors had in mind for the property a decade ago, but it looks like it now has a fighting chance.
