USE this LINK
A FEW recent mega-deals have pushed the price of Strip side wind up $20 million within the last year to $34 million and acre. That’s right – one acre. The Las Vegas land grab game is ...
...getting hundreds more interesting. Over the last year prices for an acre of land along the Las Vegas Strip has been continually accelerating, but over the last month it kind of feels prices have gone totally out of whack.
In a sequence of separate but equally astounding moves, the notion of what an acre of land at the Las Vegas Strip is worth have been entirely reset. Just last month analysts were scratching their heads at land being pegged at $17 million an acre. That figure was achieved when MGM-MIRAGE cut deals with a couple of landowners to buy several parcels of land located on the southwest corner of Las Vegas Boulevard North and Sahara Avenue. The corporate bought a 26-acre parcel from Gordon Gaming Corporation for about $444 million, and has separately agreed to buy several parcels, totaling approximately eight acres, from Concord Wilshire Acquisitions for a value of roughly $131 million. Both transactions reflect a purchase order price of roughly $17 million per acre.
Then just last week El Ad Group, headed by Israeli mogul Yitzhak Tshuva paid $1.2 billion for the 984-room New Frontier. After all it’s not the casino Tshuva wanted; it’s the land beneath it. Translation: The deal equates to about $34 million an acre for every of the site’s 34.5 acres.Now El Ad plans to construct a $5 billion multi-use development project has a two fold effect: It help to transport the middle of the Las Vegas strip farther north and it also essentially doubles land values within the area. And if you’re keeping score, El Ad is behind the Plaza redevelopment in Ny city and can utilize the moniker for this Las Vegas project.
Commenting at the deal in an analyst’s letter, Deutsche Bank analyst Bill Lerner acknowledged this sale will severely affect Las Vegas land prices in prime areas.
"We believe this has profound implications on valuations for Las Vegas operators with significant land holdings," Lerner wrote. "Notably, this transaction makes MGM's most up-to-date purchase appear attractive, and makes our current valuations for the operators' (particularly Wynn, MGM and Boyd) land seem conservative."
And after all every good story has additional layers. In one more exciting twist to this real estate story, billionaire Kirk Kerkorian is now seeking to purchase a element of MGM-MIRAGE Corp. Though he already owns 56 percent of the corporate through his investment arm Tracinda Corporation, he now desires to buy outright the famed Bellagio in addition to CityCenter. The latter project is a tremendous development containing a casino resort, retail, entertainment districts, additional hotels reminiscent of a Mandarin Oriental, and several other buildings of condominiums. Though the cost of that project have been publicly announced to price about $7.4 billion when it’s complete in 2010, behind the curtain www.onlinecasinocrawler.com has heard from multiple sources its true cost will soar past $10 billion.
On May 21 Tracinda Corporation filed a sort Schedule 13D with the Securities and Exchange Commission wherein Tracinda stated: "[Tracinda] intends to go into into negotiations with MGM MIRAGE to buy the Bellagio Hotel and Casino and town Center properties. Tracinda also wishes to pursue strategic alternatives with respect to its investment in MGM MIRAGE which can include financial restructuring transactions involving all or a considerable component of the rest of the corporate. Tracinda has made no decision with respect to this kind of restructuring transactions and reserves the suitable to not engage in or approve any transaction,"
Bellagio is the highest performing property within the MGM MIRAGE portfolio, accounting for roughly 20 percent of the company’s cash flow. And CityCenter is anticipated to rival Bellagio in quality and profitability.
Analysts are estimating that if a deal is consummated, the 2 properties could sell for greater than $12 billion.
If this doesn’t amaze you, hear this. A BIT greater than a year ago, Columbia Sussex Group won a ferocious bidding war and acquired the corporate for $1.94 billion. In that deal, Columbia got the Tropicana Las Vegas in addition to other assets. That purchase price valued that asset at about $14 million an acre. So in about 13 months, an acre of land has not just greater than doubled; its soared $20 million. An acre!
Kirkorian tried to scoop up all of MGM-MIRAGE earlier this year, but was rebuffed. Last fall he tried to shop for 15 million shares for $55 each. A 12 percent premium, however the stock soared on that move and feature since traded higher.
Now MGM MIRAGE's Board of Directors has formed a Transactions Committee made from non-management, independent directors, not affiliated with Tracinda, to think about Tracinda's statement and strategic alternatives available to MGM MIRAGE. It’s engaged UBS Investment Bank, as its financial advisor, and Weil, Gotshal & Manges LLP, as its legal advisor, to help it on this process.
At Bear Sterns, an analyst letter from Joe Greff said they're upgrading MGM MIRAGE share to Outperform from Peer Perform. He feels this may signal the start of the top for the corporate in its current form.
“We believe that [the] announcement from MGM’s majority stockholder, Tracinda Corp., should unlock significant value within the shares, and, potentially, may lead to a two or multi-stage takeout of the company,” wrote Greff.
This is readily developing into one of the crucial more fascinating stories of 2007 for the lodging and casino gaming industries. It is going to be interesting to follow. Stay tuned and strap in for what's certain to be a wild ride.
© Copyright 2007 Online Casino Crawler This material will not be published, broadcast, rewritten, or redistributed.
$25 free NO Deposit & %200 FIRST DEPOSIT BONUS! 13 Years online! SLOTLAND casino. $100,000+ progressive JackPots!
USE this LINK
USE this LINKRead More... [Source: Online Casino Crawler - Safe Online Casino reviews and casino articles]
