Sunday, July 20, 2008

The Plaza and Vegas

Everyone is familiar with the Plaza in New York, which was sold to El-Ad group for $675 million and now has successfully turned out condos, including one sold to Jimmy Cayne of Bear Stearns for $27.4 million. Martin Sass of M.D. Sass just closed on a 6300 square foot condo with a wrap around terrace for $24 million. Who wouldn't want to live in the Plaza?

So El-Ad was using the Plaza as a brand extension. Soon Plaza-Las Vegas was born. They bought the Frontier for $1.2 billion and imploded it to the ground as only Vegas can.

Las Vegas was going to have another 3,500 rooms and a million square feet of private residences in the complex. We were warned about the over building in Vegas.

The picture on the top of the page is the current development. The plans have been pushed back a bit, but not the over building stories.

Still El-Ad paid $1.2 billion for 34.5 acres, or $35 million an acre.

Wynn Resorts (WYNN 88) which bottomed at 69 a week ago after pre-announcing good earnings in Macau, and MGM (26) have huge undeveloped land resources on their balance sheet.

None of this is reflected in their stock prices. You just see a picture of a blue haired lady playing the slots on an empty casino floor, and the world thinks Las Vegas is a ghost town.

You better start playing with the ghosts now. By Halloween, these stocks will be much higher!

No comments: