Siegel Group executive Michael Crandall tells GlobeSt.com that Siegel Group affiliate Sasco Properties has assumed operational control and immediately will begin a "substantial" renovation of both the exterior and interior of the property to correct "years of deferred maintenance." Additionally, Crandall says plans are in the works to landscape the grounds and construct both a new pool and a retail component to help attract residents.
Concurrently, the property will be converted to its Siegel Suites brand of "flexible-stay" properties, which the company describes as larger-than-average residential accommodations without the commitment of a long-term lease agreement. "Due to the existing deferred maintenance combined with a 50% occupancy rate and the previous owners neglect and mismanagement of the complex, the property possesses significant upside potential," Crandall says.
The property is being renamed Siegel Suites Las Vegas Blvd. Sasco EVP Judith Perez says that, based on the performance of its 2,700-unit Vegas-area chain she expects occupancy will quickly fall in line with that of other Siegel Suites locations, increasing to 93-96% once the renovation is completed.
"This newest acquisition is situated directly on Las Vegas Boulevard and is located just one block from another of our Siegel Suites locations and these economies of scale will reduce our operational costs," says company president Stephen Siegel. "Additionally, this property is in walking distance of the many hotel-casinos that make up the Downtown Gaming District, including the Gold Spike Hotel & Casino that we recently acquired and are in the process of renovating, enabling us to cater to the employees that support these establishments and who are integral to the success of our business model."
In February, Siegel Group entered the casino business with the acquisition of the seven-story, 112-room Gold Spike Hotel and Casino in Downtown Las Vegas for $21 million. Combined with the adjacent 58-room Travel Inn it acquired in August 2007 for $5 million, the company now controls 1.5 acres located one-half block off the Fremont Street Experience, which attracts some 20 million people annually, as well as a new downtown condominium tower, the soon-to-be-renovated Lady Luck Casino and Fremont East, the city's burgeoning nightclub district.
In March, it acquired another property for its Siegel Suites brand, paying $14 million for the Mark Twain Apartments, a 228-unit complex built in the 1980s on 4.3 acres at 955 E. Twain Ave., near the University of Nevada-Las Vegas. Like Casa Palms, it was located near two other properties it had previously converted to Siegel Suites, thereby offering economies of scale.
The Siegel Group added several properties to its Siegel Suites business in 2007, including three in October. That month, it acquired Emerald Suites Tropicana, a five-year-old, 225-key hotel on 4.13 acres adjacent to Tropicana Avenue, just west of Interstate 15, for $20.25 million; the Falls apartment complex, a 230-unit, 4.8-acre property located on South Cambridge Street near UNLV, for $14.75 million; and Coliseum Villas, a 186-unit, 3.64-acre property near the corner of Paradise Road and Twain Avenue, one mile from the Falls apartments, for $13.75 million.
The company is in the process of acquiring three or four additional assets in Las Vegas that will close over the next several months. The acquisitions will include additional apartment complexes and at least one casino.
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