GlobeSt.com UPDATE: Developers Finance $97M Condo-Hotel Project

LAS VEGAS-The developers of a $97-million condominium-hotel project have closed on $87.5 million in construction financing. The project includes a 16-story residential tower and a five-story, 238-slip parking garage on a two acre site located one block east of the Strip at the intersection of Koval and Flamingo streets, near the Bellagio, Bally’s and Caesars Palace casinos. Corus Bank provided the two-year loan to Marcus Hotels & Resorts of Milwaukee and Chicago-based Diversified Real Estate Concepts. The interest rate on the loan floats over 90-day Libor. A typical float for this type of project is between 325 points and 400 points. Corus Bank SVP John Markowicz tells GlobeSt.com that while Corus finances many condominium projects, this is one of the first condo-hotel developments it is has financed. “The strong level of pre-sales helped us become comfortable in advancing 90% of project costs,” he says.The 255-unit project was announced one year ago and is in excess of 80% pre-sold, says Markowicz. Site work, such as demolition and grading, began last fall. The construction loan, which was funded several days ago, will keep the project on schedule for an opening in early 2006. Project amenities will include a luxury spa; indoor and outdoor swimming pools; a 4,500-sf rooftop terrace overlooking the Strip; an upscale restaurant and bar, a poolside lounge and a lobby cafe. Units will range from 911 sf to 2,166 sf and include a full kitchen, a balcony, a plasma screen television, an oversized whirlpool bath, a fireplace, 24-hour room service, town car service and complimentary high-speed Internet access. The units will be priced between $300,000 and $1 million, and the hotel will offer a unit rental program for owners who wish to generate income from the units. Under the developers’ joint-venture agreement, Marcus Hotels and Resorts and DREC will oversee construction management; DREC will be responsible for marketing the project; and Marcus Hotels and Resorts will operate the hotel. Marcus Hotels & Resorts currently manages, but does not have an ownership stake in, Diversified Real Estate Concepts’ Timber Ridge Lodge and Moose Mountain Falls Water Park at Grand Geneva Resort and Spa in Lake Geneva, WI.Earlier this month, DREC launched sales for another Vegas condominium hotel project, a $600-million themed development that is slated to rise on six acres next to the Platinum. To be called Aqua Blue, the 825-unit development will include two restaurants by Michael Jordan–Michael Jordan’s Steak House and Michael Jordan’s 23.sportcafe–and a 65,000-sf Michael Jordan-designed athletic center with two basketball courts, a tennis court, running track, aerobics room and free weights. In addition, the project will include a rooftop nightclub and restaurant designed by Jeffrey Beers, a boutique casino, a day spa and two pools, one on the rooftop and another on the 11th floor. Later this week, Conrad Hotels and Majestic Resorts Inc. will announce the advancement of a $350-million, 60-story non-casino hotel and condominium tower project that will be located just south of the Riviera and across from the Stardust. The 378-suite project was announced last year. The Conrad Hotel will be housed in the first 30 floors of the tower, and the Majestic Resorts will feature an additional 30 floors consisting of the 286 high-end condominiums. In addition, the development will include an upscale dining, shopping and entertainment complex.