MGM Resorts International agreed to sell the Shops at Crystals for .13 billon to the Simon Property partnership, the Real Estate Alert tip service reported March 2.
The Crystals is part of MGM’s jointly owned CityCenter development, which also is half-owned by Dubai World.
Deutsche Bank Gaming Analyst Carlo Santarelli first announced the pending deal, upon which MGM officials refused to comment. Santarelli found the Real Estate Alert tip, which quickly was picked up by other gaming analysts across the country.
Most gaming analysts indicated the deal is a positive one for MGM, whose share price rose by 1.71 percent to close at $20.27 after news spread on March 2.
MGM Resorts Chairman Jim Murren during quarterly conference calls has said MGM wants to derive more money from the 67-acre CityCenter development. Investment analysts generally agree the 500,000-sqaure-foot Crystals is a prime property, and the deal will be good for MGM’s investors.
The Crystals contains 40 luxury retail stores, restaurants, and entertainment venues, and Murren has said it should continue to grow in value, particularly after expanding into the now-empty space once occupied by the ill-fated Harmon tower.
The Harmon tower was to be a luxury high-rise luxury boutique hotel, condominiums, and spa standing some 49 stories tall and located on the corner of the Las Vegas Strip and Harmon. It was to have 400 hotel rooms and 200 condos.
Unfortunately, builders improperly installed rebar in 15 floors, and the structure would have been vulnerable to a catastrophic failure and potential collapse in the event of an earthquake or high winds, both of which are common in Southern Nevada.
An engineer discovered the mistake in 2008, about a year after construction began, and the project was halved in size to 28 stories, and the 200 condominiums nixed.
The project was to be completed in 2009, but subsequent legal battles and the onset of the Great Recession put an end to the development, leaving an empty shell that served as a glorified billboard, until it was torn down last year.
With that space open and MGM Resorts International looking to offer a REIT upon receiving regulatory approval, selling the Crystals could prove to be great timing for MGM and its investors.
