David Teed, co-founder of Dauntless Capital Partners will be speaking at the CEO-CFO Group meeting on September 28, 2007 at noon at McCormick & Schmicks. He will be discussing his experiences with turning around companies.
In North America in Mr. Teed led and managed a number of major corporate turnarounds including the turnaround of Core-Mark International Inc., a $2.5 billion per annum consumer products distributor in Canada and the U.S. He also led the turnaround of Loomis Fargo & Company Inc., which is today one of the largest armored transport providers in North America. Mr. Teed served as Chief Executive Officer of both Core-Mark International and Loomis during their turnaround periods.
He also led the acquisition of Kimpex, a manufacturer & distributor of after-market parts and accessories to the snowmobile and ATV market, which he grew and ultimately took public.
David Teed studied law at the Royal Melbourne Institute of Technology, is admitted to practice as a barrister & solicitor of the Supreme Court of Victoria and High Court of Australia and thus, began his career as a lawyer in Melbourne, Australia.
In 1985, he co-sponsored a publicly listed investment company and oversaw investments in a range of industries including manufacturing, distribution, software development, tourism and real estate.
He is also the principal investor and co-founder of Dauntless Capital Partners, a private equity sponsor and has sourced, structured and financed acquisitions in manufacturing, distribution, service and education companies.
David is also a member of the Association for Corporate Growth and a Director of the Nevada Chapter of the Turnaround Management Association.
For more information: www.ceo-cfogroup.com
Thursday, August 30, 2007
Wednesday, August 29, 2007
Las Vegas, Henderson & North Las Vegas Mixer a Big Success
Nearly 1,000 people attended the Tri-City (Las Vegas, Henderson and North Las Vegas Mixer) Chamber mixer on August 28, 2007 at the Red Rock Hotel. The mixer had plenty of appetizers and no-host bars. At times the noise level was a bit loud which caused the master of ceremonies, Bruce Spotolson of Greenspugn Media to have difficulty starting the meeting, the crowd would not stop talking. He did thank the sponsors, made a few comments and ran a video of Congressman Porter.
In attendance that I saw (it was tough getting around) were Governor Jim Gibbons, State Controller Kim Wallin, North Las Vegas Mayor Mike Montandon and State Senator Jo Heck.
Also in attendance were Stuart Olson, President of Service 1st Bank of Nevada; Dulcinea Almazan, Director of Lovitt & Touche; Terry Graves of Graves Communication and Tom Axtell, Manager of Channel 10.
In addition, Jody Mack of CardioVascular BioTherapeutics, Steve Zak of the Breakfast Club, Charlie Bass of the Las Vegas Internet Chamber of Commerce, Arnold Lopez of Nevada Power, Bob Kasner of Melon Financial; Jim Lamb of Regis University, Karen Roehl of Headhunterz, Allen Kaercher of Kaercher-Campbell, Pat Ochal of Service 1st Bank of Nevada, former State Senator Sandee Tiffany and many others.
In attendance that I saw (it was tough getting around) were Governor Jim Gibbons, State Controller Kim Wallin, North Las Vegas Mayor Mike Montandon and State Senator Jo Heck.
Also in attendance were Stuart Olson, President of Service 1st Bank of Nevada; Dulcinea Almazan, Director of Lovitt & Touche; Terry Graves of Graves Communication and Tom Axtell, Manager of Channel 10.
In addition, Jody Mack of CardioVascular BioTherapeutics, Steve Zak of the Breakfast Club, Charlie Bass of the Las Vegas Internet Chamber of Commerce, Arnold Lopez of Nevada Power, Bob Kasner of Melon Financial; Jim Lamb of Regis University, Karen Roehl of Headhunterz, Allen Kaercher of Kaercher-Campbell, Pat Ochal of Service 1st Bank of Nevada, former State Senator Sandee Tiffany and many others.
Mr Chow to Come to Las Vegas
Mr. Chow's restaurant is coming to Las Vegas according to Michael Politz's weekly "Eye on Vegas" column. He notes that there are strong rumors that the ultra hip Beverly Hills restaurant, Mr. Chow, will open a restaurant in Las Vegas. Politz's sources tell him that the restaurant would be located at the CityCenter Project in the Light Group's hotel, The Harmon.
Mr. Chow has restaurants in Beverly Hills, New York and London. The concept, which started in London in 1968, serves sophisticated Chinese food in a European setting. Mr. Chow is the creation of Michael Chow. "The man and Mr. Chow the dining experience are both international icons of todays cultural landscape." The Light Group that is developing the property into a hip boutique hotel sees Mr. Chow's as a crucial element of the property. The Light Group also runs the Light Nightclub at the Bellagio, the Fix Restaurant & Bar at the Bellagio, the Caramel Bar & Lounge at the Bellagio, the Jet Nightclub at The Mirage, the Stack Restaurant & Bar at The Mirage and the Mist at the Treasure Island. Las Vegas will continue to improve its hip and cutting edge image with the addition of Mr. Chow.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "Welcome Mr. Chow: An Eye Exclusive." Michael Politz. Eye on Vegas. July 23, 2007.
2. www.mrchow.com
3. www.thelightgroup.com
Mr. Chow has restaurants in Beverly Hills, New York and London. The concept, which started in London in 1968, serves sophisticated Chinese food in a European setting. Mr. Chow is the creation of Michael Chow. "The man and Mr. Chow the dining experience are both international icons of todays cultural landscape." The Light Group that is developing the property into a hip boutique hotel sees Mr. Chow's as a crucial element of the property. The Light Group also runs the Light Nightclub at the Bellagio, the Fix Restaurant & Bar at the Bellagio, the Caramel Bar & Lounge at the Bellagio, the Jet Nightclub at The Mirage, the Stack Restaurant & Bar at The Mirage and the Mist at the Treasure Island. Las Vegas will continue to improve its hip and cutting edge image with the addition of Mr. Chow.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "Welcome Mr. Chow: An Eye Exclusive." Michael Politz. Eye on Vegas. July 23, 2007.
2. www.mrchow.com
3. www.thelightgroup.com
Sunday, August 26, 2007
Las Vegas Housing Market Hits a Rough Patch
The Las Vegas housing market has slowed down considerably since last year (2006). Sales are off by 40 percent and prices continue to fall and home builders have sharply cut back on construction. Las Vegas was ranked among the top four at-risk housing markets by PMI Mortgage Insurance Co. The others are Phoenix, Riverside and West Palm Beach, Fla.
The inventory of unsold homes has reached 30,000 in July 2007 which includes homes on the Multiple Listing Service plus new homes from homebuilders and condos. It is reported that nearly 40 percent of them are vacant. Sales of homes have sunk to a low of 1,400 in June 2007, normally a brisk month for home sales. At the current rate of home sales, Las Vegas has close to an 18 month inventory of homes. The national average is 6 to 7 months currently.
Real estate consultant John Burns said home prices in Las Vegas must drop by 33 percent, or about $100,000, before the market returns to normal conditions as he told the Associated Press. He said the housing cost-to-income ratio in both Las Vegas and Reno is 50 percent, meaning people spend half their income on housing. The national average is around 30 percent.
Analysts are in a disagreement about when the market in Las Vegas will come back. Las Vegas continues to see population increases. A number of new hotels will open in the next three years and employees will need housing which will offset the loss of commercial construction jobs. The meltdown in subprime lending will delay buyers coming into the market as credit standards have been tightened and the affordability of housing will be another factor.
It's been a rough market for home builders. Richmond American announced a $106 million loss for the quarter ending June 30, 2007 which included pre-tax charges of $161.1 million for asset impairments and $6.4 million for write-offs of deposits and pre-acquisition costs on cancelled land option contracts. This loss combined with the first quarter's loss, totaled a net loss for the six months ended June 30, 2007 of $200.5 million, which included pre-tax charges of $302.5 million for asset impairments and $10.5 million for write-offs.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "M.D.C. Holdings Announces Second Quarter 2007 Results." Company Press Release. PRNewswire-FirstCall. July 25, 2007.
2. "Price Drop May Signal Correction." Brian Wargo. In Business Las Vegas. August 10, 2007.
3. "Housing Inventory Hits Record as Sales Slow." Brian Wargo. In Business Las Vegas. July 13, 2007.
4. "Las Vegas Inventory (Sales)." Bubble Markets Inventory Tracking. www.bubbletracking.blogspot.com. August 10, 2007.
5. "Analysts See No End in Sight to Las Vegas Housing Slump." Associated Press. July 15, 2007.
The inventory of unsold homes has reached 30,000 in July 2007 which includes homes on the Multiple Listing Service plus new homes from homebuilders and condos. It is reported that nearly 40 percent of them are vacant. Sales of homes have sunk to a low of 1,400 in June 2007, normally a brisk month for home sales. At the current rate of home sales, Las Vegas has close to an 18 month inventory of homes. The national average is 6 to 7 months currently.
Real estate consultant John Burns said home prices in Las Vegas must drop by 33 percent, or about $100,000, before the market returns to normal conditions as he told the Associated Press. He said the housing cost-to-income ratio in both Las Vegas and Reno is 50 percent, meaning people spend half their income on housing. The national average is around 30 percent.
Analysts are in a disagreement about when the market in Las Vegas will come back. Las Vegas continues to see population increases. A number of new hotels will open in the next three years and employees will need housing which will offset the loss of commercial construction jobs. The meltdown in subprime lending will delay buyers coming into the market as credit standards have been tightened and the affordability of housing will be another factor.
It's been a rough market for home builders. Richmond American announced a $106 million loss for the quarter ending June 30, 2007 which included pre-tax charges of $161.1 million for asset impairments and $6.4 million for write-offs of deposits and pre-acquisition costs on cancelled land option contracts. This loss combined with the first quarter's loss, totaled a net loss for the six months ended June 30, 2007 of $200.5 million, which included pre-tax charges of $302.5 million for asset impairments and $10.5 million for write-offs.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "M.D.C. Holdings Announces Second Quarter 2007 Results." Company Press Release. PRNewswire-FirstCall. July 25, 2007.
2. "Price Drop May Signal Correction." Brian Wargo. In Business Las Vegas. August 10, 2007.
3. "Housing Inventory Hits Record as Sales Slow." Brian Wargo. In Business Las Vegas. July 13, 2007.
4. "Las Vegas Inventory (Sales)." Bubble Markets Inventory Tracking. www.bubbletracking.blogspot.com. August 10, 2007.
5. "Analysts See No End in Sight to Las Vegas Housing Slump." Associated Press. July 15, 2007.
Saturday, August 25, 2007
The Unbloody Streets of Las Vegas by Doug French
The temperature has been especially hot this year in Las Vegas. Day after day, by late afternoon thermometers hit 110 degrees or more. For those of us who have been here a while, we may be annoyed, but resign ourselves to dealing with the dry heat, and congratulate ourselves for not having to shovel snow in the winter.
For the 200 people per day that move here the heat is shocking: especially for the 35 percent that move in from temperate California. There is no lonelier day than the day a person moves to Las Vegas in the summer: a glaring sun, oppressive temperature, and a rental truck full of furniture that must be toted to an upstairs apartment from a parking lot a football field away, and no new neighbors offering to help. Las Vegas doesn't start easy for anyone, and for some it gets no better. A few years ago a study found Sin City one of the top five most stressful cities in the United States, with the highest suicide and divorce rates in the study, as well as a great deal of alcohol use.
But people continue to migrate to Las Vegas, immigrants from the economic mismanagement of states both near and far away. Economists over at UNLV, Keith Schwer and Bob Potts, estimate that 50,000 jobs were created in Las Vegas last year. And more jobs are on the way as the LV Strip's latest building boom begins to bear fruit starting this December with the opening of LV Sands' $1.8 billion, 3,025-room Palazzo. By 2012, 45,000 more hotel rooms will be constructed on the Strip.
With the demographic winds at their backs, casino operators aren't worried about filling the rooms with tourists, but finding employees will be a challenge. According to a report authored by Deutsche Bank Securities, the casino industry will need 113,500 more workers to fill the spots created by the new resorts that are now under construction. Unless the city's population growth begins to accelerate, 25,000 of these jobs will go unfilled according to the investment bank report.
By the time MGM Grand's massive $7.4 billion CityCenter project comes on line in late 2009, competition for employees could be keen, and the gaming giant will have 12,000 spots to fill at the multi-use project. A year later, Boyd Gaming's Echelon Place will come on line and they will be looking for over 10,000 workers.
Despite a red-hot economy and prospects for more of the same, to read the financial press and listen to Wall Street pundits the Las Vegas housing market couldn't be colder. But is it? In many ways the Las Vegas housing market is just simply returning to normal after the irrational exuberance of 2005 when just short of 39,000 new homes and condos were sold and 58,522 resale homes changed hands.
Back not so long ago in 2000, with the Venetian not a year old and Steve Wynn buying the Desert Inn property with only an idea in his head, new home sales in Las Vegas were 20,520 and resales totaled 29,515.
Through June of this year, 10,395 new homes and 14,556 used homes have been sold. If this pace continues, just short of 50,000 homes will change hands in 2007, an almost identical amount of sales to the number in year 2000, a year that was considered at the time a strong housing year.
Back in 2000 there were 130 builders selling homes in the Las Vegas market, according to Home Builders Research, Inc., but by last year the number was down to 77. And all but one of the top ten builders last year were large publicly traded builders, with the top ten accounting for nearly 56 percent of all new home closings. Thinking the boom would never end, these public builders bid up the price of land hoping to gain or maintain market share and now, according to Larry Murphy at SalesTraq, there are 572 different competing subdivisions in the market, nearly twice as many as the 295 when the boom was just beginning in 2003.
With housing market en fuego in 2005, 60-70 people a week visited each subdivision. Now MetroStudy says only 20 per week are bothering to look for a home. So, instead of the average subdivision selling two to three homes per week, now builders feel fortunate to sell that number in a month.
Builders are pulling out all the stops to rid themselves of inventory, giving away thousands in incentives and in some cases lowering prices. With significant drops in the prices of lumber and other materials, combined with a very hungry subcontractor workforce, decent profits can be had selling new homes at $150 per square foot and below. At the end of June, builders had only 2,164 units in standing inventory, a one-month to six-week supply according to SalesTraq's Larry Murphy.
Meanwhile the Multiple Listing Service reached a record 23,642 homes in June, with reportedly 40 percent of those homes sitting vacant. No doubt, speculators bought many of these homes in 2005 for $200 per square foot believing housing prices could never decline.
But while housing analysts point at Las Vegas as the poster child for the housing bust because of the number of foreclosure filings, local real estate expert, Marketing Solutions executive vice president Stephen Bottfeld points out that a review of the foreclosure filings reveals that some individual out-of-town investors have as many as 40 homes being foreclosed upon.
Dennis Smith of Home Builders Research pointed out at a seminar earlier this year, that selling homeowners are greedy and won't give away buyer incentives, while builders will move houses any way they can. Besides, most people prefer to live where no one else has "cut their toenails," as one builder has his sales staff remind buyers, if the customers are waffling between his new product and a resale home.
With an eye on their declining stock prices the publicly traded builders have all but stopped pulling building permits and started thinning their employee ranks. According to In Business Las Vegas magazine, "Some major builders have eliminated more than 100 jobs or more than 40 percent of their Las Vegas workforce in the last six to nine months."
It's likely that builders in Las Vegas will pull fewer than 20,000 new home permits this year for the second year in a row. No wonder that compared to the fourth quarter of 2005, there were 39 percent fewer framing contractors, 20 percent fewer painting contractors, 19 percent fewer general single-family home construction workers, 14 percent fewer foundation contractors and 10 percent fewer plumbing and heating workers.
Before last year, the last time there were fewer than 20,000 new homes permits pulled during a calendar year in Las Vegas was 1999, when the median new home price was $139,500. This May, the median price was just short of $309,000, only a 4.4 percent decrease from a year ago. Real estate consultant John Burns believes home prices in Las Vegas are too high and must drop by 33 percent, or about $100,000, before the market returns to normal conditions, given a median family income of $50,465. But Burns shouldn't hold his breath. Hispanic families are solving the affordable housing dilemma by buying homes with one or two other families. And an angry Stephen Bottfeld told his July Crystal Ball crowd last week that there is "no way homes will lose 30 percent in value this year, or next year or the year after… or all three years put together."
The residential real estate business may be punk out in the suburbs, but on the Las Vegas Strip it's as hot as the weather. The New Frontier closed its doors forever at midnight on July 15th. El Ad Properties paid Phil Ruffin $33 million per acre or a total of $1.2 billion for the aging property he bought in 1998 for $167 million. The Israeli company intends to spend $5 billion constructing a replica of New York's famed Plaza Hotel on the property.
Condo sales are so brisk at MGM Grand's CityCenter the company has assembled 78 acres on the north Strip to do another massive mixed-use project. "Just two years ago we would never have conceived of buying more land on the Strip," company CFO and president Jim Murren told the Las Vegas Sun. But after selling more than a billion dollars worth of condos at CityCenter in just a few months, Murren says, "We can do this all over again."
The Nevada gaming market is rocking, setting a record in May by winning $1.14 billion from gamblers. The majority of that win came from the Las Vegas Strip that has consolidated even more than the homebuilding market. MGM Grand and Harrah's together control three quarters of the hotel rooms on the Strip, and MGM holds an incredible 865 acres on the Strip, with 250 of the acres being undeveloped. But unlike the large homebuilders that wish they had a few less acres, Mr. Murren says, "Anyone who has ever sold land (on the Strip) has lived to regret it." Strip land "goes up slowly or rapidly, but it doesn't ever go down."
According to Bottfeld, "what happens on the Strip gets mirrored in the housing market." He predicts the Las Vegas housing slump that began in April of last year will begin to recover when the Palazzo opens later this year and will be fully healed by August of next year. And to the naysayers on Wall Street and beyond, who say the Las Vegas housing market slump will persist indefinitely, Bottfeld contends another Las Vegas boom is right around the corner in 2009.
The old saw repeated often by Las Vegas old timers is that if there are high-rise cranes on the Strip, it's a good time to buy real estate. Dozens of them continue to dot the skyline. Number crunchers stress that each new hotel room creates 2.5 jobs, and that each new hotel/casino job creates another 1.5 jobs off the Strip. The people who will ultimately fill those jobs don't live in Las Vegas yet. When they pull into town in their rental trucks they will need places to live.
Baron Rothschild advised that one "should invest when there is blood in the streets."
It won't be bloody in Las Vegas much longer.
Doug French is an executive vice president of a Nevada bank and is an associate editor of Liberty Watch Magazine. He is a recipient of the Murray N. Rothbard Award. This article is reprinted by permission from the authored and first appeared at www.lewrockwell.com on July 21, 2007.
For the 200 people per day that move here the heat is shocking: especially for the 35 percent that move in from temperate California. There is no lonelier day than the day a person moves to Las Vegas in the summer: a glaring sun, oppressive temperature, and a rental truck full of furniture that must be toted to an upstairs apartment from a parking lot a football field away, and no new neighbors offering to help. Las Vegas doesn't start easy for anyone, and for some it gets no better. A few years ago a study found Sin City one of the top five most stressful cities in the United States, with the highest suicide and divorce rates in the study, as well as a great deal of alcohol use.
But people continue to migrate to Las Vegas, immigrants from the economic mismanagement of states both near and far away. Economists over at UNLV, Keith Schwer and Bob Potts, estimate that 50,000 jobs were created in Las Vegas last year. And more jobs are on the way as the LV Strip's latest building boom begins to bear fruit starting this December with the opening of LV Sands' $1.8 billion, 3,025-room Palazzo. By 2012, 45,000 more hotel rooms will be constructed on the Strip.
With the demographic winds at their backs, casino operators aren't worried about filling the rooms with tourists, but finding employees will be a challenge. According to a report authored by Deutsche Bank Securities, the casino industry will need 113,500 more workers to fill the spots created by the new resorts that are now under construction. Unless the city's population growth begins to accelerate, 25,000 of these jobs will go unfilled according to the investment bank report.
By the time MGM Grand's massive $7.4 billion CityCenter project comes on line in late 2009, competition for employees could be keen, and the gaming giant will have 12,000 spots to fill at the multi-use project. A year later, Boyd Gaming's Echelon Place will come on line and they will be looking for over 10,000 workers.
Despite a red-hot economy and prospects for more of the same, to read the financial press and listen to Wall Street pundits the Las Vegas housing market couldn't be colder. But is it? In many ways the Las Vegas housing market is just simply returning to normal after the irrational exuberance of 2005 when just short of 39,000 new homes and condos were sold and 58,522 resale homes changed hands.
Back not so long ago in 2000, with the Venetian not a year old and Steve Wynn buying the Desert Inn property with only an idea in his head, new home sales in Las Vegas were 20,520 and resales totaled 29,515.
Through June of this year, 10,395 new homes and 14,556 used homes have been sold. If this pace continues, just short of 50,000 homes will change hands in 2007, an almost identical amount of sales to the number in year 2000, a year that was considered at the time a strong housing year.
Back in 2000 there were 130 builders selling homes in the Las Vegas market, according to Home Builders Research, Inc., but by last year the number was down to 77. And all but one of the top ten builders last year were large publicly traded builders, with the top ten accounting for nearly 56 percent of all new home closings. Thinking the boom would never end, these public builders bid up the price of land hoping to gain or maintain market share and now, according to Larry Murphy at SalesTraq, there are 572 different competing subdivisions in the market, nearly twice as many as the 295 when the boom was just beginning in 2003.
With housing market en fuego in 2005, 60-70 people a week visited each subdivision. Now MetroStudy says only 20 per week are bothering to look for a home. So, instead of the average subdivision selling two to three homes per week, now builders feel fortunate to sell that number in a month.
Builders are pulling out all the stops to rid themselves of inventory, giving away thousands in incentives and in some cases lowering prices. With significant drops in the prices of lumber and other materials, combined with a very hungry subcontractor workforce, decent profits can be had selling new homes at $150 per square foot and below. At the end of June, builders had only 2,164 units in standing inventory, a one-month to six-week supply according to SalesTraq's Larry Murphy.
Meanwhile the Multiple Listing Service reached a record 23,642 homes in June, with reportedly 40 percent of those homes sitting vacant. No doubt, speculators bought many of these homes in 2005 for $200 per square foot believing housing prices could never decline.
But while housing analysts point at Las Vegas as the poster child for the housing bust because of the number of foreclosure filings, local real estate expert, Marketing Solutions executive vice president Stephen Bottfeld points out that a review of the foreclosure filings reveals that some individual out-of-town investors have as many as 40 homes being foreclosed upon.
Dennis Smith of Home Builders Research pointed out at a seminar earlier this year, that selling homeowners are greedy and won't give away buyer incentives, while builders will move houses any way they can. Besides, most people prefer to live where no one else has "cut their toenails," as one builder has his sales staff remind buyers, if the customers are waffling between his new product and a resale home.
With an eye on their declining stock prices the publicly traded builders have all but stopped pulling building permits and started thinning their employee ranks. According to In Business Las Vegas magazine, "Some major builders have eliminated more than 100 jobs or more than 40 percent of their Las Vegas workforce in the last six to nine months."
It's likely that builders in Las Vegas will pull fewer than 20,000 new home permits this year for the second year in a row. No wonder that compared to the fourth quarter of 2005, there were 39 percent fewer framing contractors, 20 percent fewer painting contractors, 19 percent fewer general single-family home construction workers, 14 percent fewer foundation contractors and 10 percent fewer plumbing and heating workers.
Before last year, the last time there were fewer than 20,000 new homes permits pulled during a calendar year in Las Vegas was 1999, when the median new home price was $139,500. This May, the median price was just short of $309,000, only a 4.4 percent decrease from a year ago. Real estate consultant John Burns believes home prices in Las Vegas are too high and must drop by 33 percent, or about $100,000, before the market returns to normal conditions, given a median family income of $50,465. But Burns shouldn't hold his breath. Hispanic families are solving the affordable housing dilemma by buying homes with one or two other families. And an angry Stephen Bottfeld told his July Crystal Ball crowd last week that there is "no way homes will lose 30 percent in value this year, or next year or the year after… or all three years put together."
The residential real estate business may be punk out in the suburbs, but on the Las Vegas Strip it's as hot as the weather. The New Frontier closed its doors forever at midnight on July 15th. El Ad Properties paid Phil Ruffin $33 million per acre or a total of $1.2 billion for the aging property he bought in 1998 for $167 million. The Israeli company intends to spend $5 billion constructing a replica of New York's famed Plaza Hotel on the property.
Condo sales are so brisk at MGM Grand's CityCenter the company has assembled 78 acres on the north Strip to do another massive mixed-use project. "Just two years ago we would never have conceived of buying more land on the Strip," company CFO and president Jim Murren told the Las Vegas Sun. But after selling more than a billion dollars worth of condos at CityCenter in just a few months, Murren says, "We can do this all over again."
The Nevada gaming market is rocking, setting a record in May by winning $1.14 billion from gamblers. The majority of that win came from the Las Vegas Strip that has consolidated even more than the homebuilding market. MGM Grand and Harrah's together control three quarters of the hotel rooms on the Strip, and MGM holds an incredible 865 acres on the Strip, with 250 of the acres being undeveloped. But unlike the large homebuilders that wish they had a few less acres, Mr. Murren says, "Anyone who has ever sold land (on the Strip) has lived to regret it." Strip land "goes up slowly or rapidly, but it doesn't ever go down."
According to Bottfeld, "what happens on the Strip gets mirrored in the housing market." He predicts the Las Vegas housing slump that began in April of last year will begin to recover when the Palazzo opens later this year and will be fully healed by August of next year. And to the naysayers on Wall Street and beyond, who say the Las Vegas housing market slump will persist indefinitely, Bottfeld contends another Las Vegas boom is right around the corner in 2009.
The old saw repeated often by Las Vegas old timers is that if there are high-rise cranes on the Strip, it's a good time to buy real estate. Dozens of them continue to dot the skyline. Number crunchers stress that each new hotel room creates 2.5 jobs, and that each new hotel/casino job creates another 1.5 jobs off the Strip. The people who will ultimately fill those jobs don't live in Las Vegas yet. When they pull into town in their rental trucks they will need places to live.
Baron Rothschild advised that one "should invest when there is blood in the streets."
It won't be bloody in Las Vegas much longer.
Doug French is an executive vice president of a Nevada bank and is an associate editor of Liberty Watch Magazine. He is a recipient of the Murray N. Rothbard Award. This article is reprinted by permission from the authored and first appeared at www.lewrockwell.com on July 21, 2007.
Thursday, August 23, 2007
Las Vegas has 8 of the Top 25 Grossing Restaurants in the US
Tao Nightclub and Asian Bistro at the Venetian was the top grossing independent restaurant in the United States at $55 million according to Restaurants and Institutions magazine. New York's Tavern on the Green was second at $38 million. Seven other Las Vegas restaurants were also in the top 25 grossing restaurants for 2007.
Although no other Las Vegas restaurant could come close to Tao's $55 million, the Mix restaurant was in the top 10 with $20 million. Rounding out the top 25 for Las Vegas were Mon Ami Gabi at $18 million, Joe's Seafood, Prime Steak & Stone Crab at $17 million, SW Steakhouse at $17 million, Delmonico Steakhouse at $15.8 million and the Prime Steakhouse at $15 million. Who would have thought that the restaurant business could generate such sales? The Tao Nightclub and Asian Bistro took over their location from the Warner Brothers restaurant which had struggled at that spot. However, it goes to show that Las Vegas has turned into a much greater restaurant town; it now has 21 restaurants on the list of the 100 top grossing restaurants which is more than twice as many as it had in 2000.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "R&I Top 100 Independent Restaurants-2007." www.rimag.com.
2. "Setting Restaurant Records by Selling the Sizzle." Joe Drape. The New York Times.July 22, 2007.
First of the Casino Openings: Venetian's Palazzo to Open in Dec' 2007
The Venetian's Palazzo tower will open December 20, 2007 in the first of a wave of hotel tower openings. Wynn's Encore is scheduled to open in late 2008, MGM's CityCenter and the Fontainebleau will open in November 2009 and Echelon Place will open in September 2010.
The Palazzo is a $1.8 billion project which has been described as a "world-class luxury hotel, casino and resort with a design and ambiance reminiscent of high-end locales such as Beverly Hills, Bel-Air and Rodeo Drive." The 50 story hotel will be the second tallest building in Las Vegas, after the Trump Tower. The additional 3,068 rooms will make the Venetian and Sands Expo and Convention Center the largest resort and hotel complex in the world, with approximately 7,074 hotel rooms.
Some of the new features of the Palazzo will be a 60 foot glassed domed entry lobby featuring a two-story fountain. There will also be a 450,000 square foot enclosed shopping, dining and entertainment complex, which will have around 80 shops and restaurants. The retail mall which will be connected to the Grand Canal shops will open in January 2008. The Palazzo will have a new 4,000-space underground parking garage in which elevators and escalators will carry visitors from the garage directly to the center of the casino.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "Palazzo, Venetian, Sands, News." www.vegastodayandtomorrow.com
August 5, 2007.
2. www.lasvegassands.com/palazzo.html
The Palazzo is a $1.8 billion project which has been described as a "world-class luxury hotel, casino and resort with a design and ambiance reminiscent of high-end locales such as Beverly Hills, Bel-Air and Rodeo Drive." The 50 story hotel will be the second tallest building in Las Vegas, after the Trump Tower. The additional 3,068 rooms will make the Venetian and Sands Expo and Convention Center the largest resort and hotel complex in the world, with approximately 7,074 hotel rooms.
Some of the new features of the Palazzo will be a 60 foot glassed domed entry lobby featuring a two-story fountain. There will also be a 450,000 square foot enclosed shopping, dining and entertainment complex, which will have around 80 shops and restaurants. The retail mall which will be connected to the Grand Canal shops will open in January 2008. The Palazzo will have a new 4,000-space underground parking garage in which elevators and escalators will carry visitors from the garage directly to the center of the casino.
John Laub is the President of the CEO-CFO Group. (www.ceo-cfogroup.com)
1. "Palazzo, Venetian, Sands, News." www.vegastodayandtomorrow.com
August 5, 2007.
2. www.lasvegassands.com/palazzo.html