Las Vegas Housing Market Back On Upswing

Summerlin Las Vegas Road
Road To Nowhere

I generally keep this blog to casinos, gaming and travel between Atlantic City and Las Vegas but every now and again I’ll sprinkle in a taste of life I find exploring Vegas. I typically end up in casinos or other toursity spots so this works well. A few weeks ago I was driving around the suburbs drinking coffee on a beautiful Sunday morning when I noticed that formerly barren corners of Las Vegas were beginning to get some action. I thought this was a sign that something was happening but wasn’t sure what to make of it. Yesterday we got this news:

U.S. home prices spiked 10.9 percent in March compared to the same period a year ago, with all 20 cities measured in the most recent Standard & Poor’s/Case-Shiller housing report posting positive year-over-year growth for the third month in a row.

Phoenix has the largest annual increase in annual prices at 22.5 percent, followed by San Francisco with 22.2 percent and Las Vegas with 20.6 percent. Boston annual prices rose 6.7 percent, according to the report.

The increase in housing sales explains the activity I’ve witnessed in my corner of Vegas. The drive on this Sunday morning took me to the edge of civilization and the Red Rock mountains. I imagine that this land, like much of the other land around it, was probably desert just a few years ago before the last Vegas building boom. The road to nowhere on this day shows where the building ended (left side of the street) and where building has ramped up again (right side).

Long Road To Nowhere Las Vegas

Las Vegas is still new to me since most of my travels end up in casinos and I often end up taking roads to nowhere when I want to clear my head. These are roads where the Las Vegas boom just stops. Roads are unfinished and there partially started construction sites. It’s kind of sad but also kind of cool to look at because it’s something I’ve never seen before.

End Of The Road Las Vegas

The road to nowhere above used to just end. There were no machines moving and nothing happening. This Sunday morning they were resting like normal people…err machines but have been working during normal work hours. Looping back you can see that houses are being worked on right now.

Nowhere House Las Vegas

The construction out in the Vegas burbs has resumed and that’s a good sign of the Las Vegas economy. The Vegas strip has also begun preparing for an improved economy with construction resuming last year with The Linq and this year with MGM and SLS Vegas construction.

The next boom in Vegas won’t be as extravagant as when CityCenter, Cosmopolitan, Wynn and Encore where built but new activity on the strip and in the burbs can only mean good things in the near future for both Vegas and Las Vegas.

The Vegas Strip Of The Future Will Feel More Like A Strip Mall

Las Vegas Is Becoming A Strip Mall
Strip Mall!

I grew up in the Bronx, NY. We didn’t have malls. We had stores on streets and even had a few shopping centers. I had to drive 20-30 minutes to the nearest mall. It was like a whole other world. I wouldn’t say it was awesome but it was different and that was cool. It wasn’t until I was in my teens that I knew what a strip mall was.

Strip malls weren’t cool then, have never been cool and aren’t cool now. That doesn’t matter in Las Vegas. Vegas is the greatest place on earth but it’s never really been “cool”. That’s okay. Caesars Entertainment has been developing The Linq over the past year and that should be finished by the end of the year. Call it what you want but The Linq is essentially a glorified strip mall set between casinos.

Caesars Entertainment is also developing the Bally’s Grand Bazaar (details here and here) a little bit south on the strip from The Linq. Now Vegas Tripping is reporting that MGM Resorts will be creating The Park even further south on the Vegas strip in the area around Monte Carlo and New York New York.

We can confirm that the park will occupy Rue de Monte Carlo, including the CityCenter sales office and the entire parking lot behind and between New York New York and Monte Carlo.

Further, Vegas Tripping has details on the strip renovations planned for Monte Carlo. While The Linq will have a ferris wheel as the anchor of the shopping area The Park will have a brand spanking new arena that MGM Resorts is building in conjunction with AEG. A little north of Monte Carlo you’ll find Crystals mall next to Aria at the area formerly known as CityCenter.

My graphic skills are pretty bad but the future Vegas strip will look something like this:

Shopping > Casino > Shopping > Casino > Shopping > Casino > Shopping > Casino  

It sure seems like Vegas is remaking itself more towards being a family destination then it has since they started theming hotels in the late 80’s and early 90’s.

Great…more kids. I’m not the typical Vegas customer but that’s not what I want from Vegas.

Photo: Warren Temple Smith

More On Why The Vegas Strip Is Changing

I love the Vegas strip. There’s no place in the world like it. There never has been and there never will be. It’s awesome. That said, the strip has been changing a lot from when I first started visiting Las Vegas for bettor better and worse. Right now the center of the Vegas strip is where you’ll find plenty of construction for The Linq, The Quad and Bill’s but in the next few years the construction will be moving to the north end of the strip with Resorts World and SLS Hotel.

The Vegas strip change isn’t anything new. CityCenter, Cosmopolitan and even Wynn ushered in change over the past decade because their customers are changing. People don’t come to Las Vegas just to gamble like they used to. They come for the night clubs, fine dining and shows. In fact, people have been coming to Las Vegas for those things more often almost every year since 1990 and in 1999 when people began spending more money on things beyond the casino.

 

Gaming Vs Non Gaming Revenue

Revenue is the total amount of money spent and not profit. This chart only shows gaming and non-gaming revenue so let’s look at an approximation on gross profit. The house edge (ie. gross profit) on some of the worst bets in the casino is only 30% with the lowest house advantages being under 1%. Meanwhile, the markup on a bottle of wine in a 4 star restaurant can be 200% or more. Even a soda at a low end restaurant will be marked up over 1,000%. The markup on a bottle of vodka at a nightclub dwarves all both of those.

In todays, corporate run, Las Vegas every square inch of a casino has to show a profit. This information has to be reported every quarter and in order to show shareholders that the future looks bright they have to always show a profit. Sure the casino may lure you in but the real money is made on those awesome SW steak dinners or at a table in Marquee.

Even if the Cosmo only gets a percentage of the revenue from Marquee there is a nice chunk of money to be made their from small stake plus rent plus overflow spending at restaurants and bars.

Gambling hasn’t left Las Vegas. Far from it. While the chart above shows that 35% of the revenue earned on the Vegas strip is from gaming you’ll find that Downtown Vegas still earns the majority of its revenue from gaming.

Moving forward expect this trend to continue. If you’re a gambler you’ll probably find better gaming options and more people like you downtown. If you don’t mind worse gaming odds and don’t mind being around different people you will still be able to find fun on the Vegas strip.

Personally, I love the both the gaming and non-gaming Las Vegas and look forward to seeing what the future brings.

Photo: abpan.com

Changes Happening To The Vegas Strip Right Now

There are a lot of changes happening on the Las Vegas strip right now. Many people just know the construction as an inconvenience. Most of the major projects happening on the strip right now are Caesars Entertainment casinos, hotels and shopping areas. Here’s the quick breakdown in order of new projects opening.

OutImperial Palace (photo flickr/ ayersa@sbcglobal.net) – Caesars Entertainment does not own the license for the name Imperial Palace and decided not to renew their lease on the name. The property is undergoing a name change to The Quad and being renovated.

Imperial Palace Las Vegas
In: The Quad – Caesars decided to only renovate the casino and not hotel of The IP/The Q. The good news is you’ll have a new casino. The bad news is you can still get the dirtiest rooms on the strip! Hey, at least they’re cheap. Transformation will be completed by 12/21. Learn more details about The Quad at Vegas Chatter.

The Quad Las Vegas

Out: O’Shea’s – O’Sheas closed earlier this year and is the biggest closure because of what’s being built in its place, The Linq. I’m happy to see this dump go away, but it was a place for people to go and gamble and drink for cheap. It had a place on the strip.

O'Sheas

In: The Linq – The Linq is not a casino. Instead it will be a variety of retail outlets, restaurants and bars with a ferris wheel as the anchor to the area. This will be a huge area of the strip that seems as if it will rival CityCenter in size. The Linq’s tenant’s aren’t very exciting but there’s nothing horribly offensive about any of the bars or restaurants. The Linq is scheduled to open December 2013. Vegas Chatter has a lot more information on this huge space causing traffic on the strip.

The Linq Las Vegas

Out: Bill’s Gambling Hall & Saloon (photo flickr/ anna_jewels) – Bill’s will close in February 2013 and will be gutted but not imploded. In its place a new “boutique” hotel/casino will open focused on serving people more interested in nightclubs than gambling. I’ve never been inside of Bill’s, but people that like cheap drinking and gambling were their customer. Notice the trend here by Caesars?

Bill's Gambling Hall & Saloon Las Vegas
In: Drai’s (Actual name TBD) – This casino will be completely different by the time renovations are complete in 2014. From all accounts it seems as if this will be geared towards the same people that go to Cosmopolitan for Marquee nightclub. It will be interesting to see how that segment of Vegas visitors develops over the next two years. No photo here since there’s no renderings.

Maybe more: There was talk of Bally’s Grand Bazaar shops being built on the strip earlier this year but I haven’t heard anything recently and there’s no construction happening right now.

I have no memories tied to any of the places closing on the strip so I’m not sad about any of these changes. I look forward to seeing what the strip looks like in 2014.

Tweet me @eastcoastgamblr

 

The Linq Announces Exciting Tenants

Caesars Entertainment announced some more tenants for The Linq and it’s as exciting as you’d imagine.

…the Yard House restaurant aims to slake the thirsts of beer fans, while the Asian-themed F.A.M.E.— for food, art, music and entertainment — market will offer sushi, dim sum, noodle bowls and robata grill foods to patrons in lounge seating and street art from urban Hong Kong, Tokyo, Singapore and Seoul.

Other tenants include Sprinkles, a Los Angeles-based cupcake and ice cream shop; Flower and Barley, a brick oven pizzeria; Koto, an oddities and gifts store with outlets in Miami and Aspen, Colo.; and Off the Strip, a bistro and bar.

Caesars customers tend to be your average consumer. People from the coasts might say that Caesars markets to middle America. These are the blandest of the bland consumers. Your average mall shopper.

This person is the polar opposite of who The Cosmopolitan is trying to reach. Caesars customers are not young, cool or looking for anything new and interesting. I like Yard House, but this is a perfect example of what Caesars customers want. They play classic rock and serve beer. What says middle America more than that?

It’s cool, we’re not all the same and that’s cool.

Caesars has filled 12 of 18 spots in The Linq shopping and eating area with a year or so to go before opening. This seems very similar to the rate MGM acquired tenants for Crystals at City Center. That’s not bad.

I’m not going to predict success or failure until The Linq is open (if it opens), but the initial tenants show me that Caesars knows who their customer is.

There are still 6 spots left at The Linq and I’m hoping for Speaker City to be one of them.

Nobody Likes Caesars Palace

Yesterday I realized that nobody likes Caesars Entertainment properties in Las Vegas. This is nothing new and not really a surprise to me, but it’s definitely a fact. I’ve been living in Vegas for just over a year now and have a lot of visitors. Some will stay at Caesars properties since they get great rates through Total Rewards but, in generally, nobody chooses a Caesars property to meet for a drink or meal. Since I live here I usually let other people choose where we’re going to meet when they’re in town.

Not once in my 14 months living in Vegas has anyone ever chosen to meet me at a Caesars property.

Most people know I’m Diamond status with Total Rewards (some know that I’ve been Diamond for a few years) and can get free drinks and/or snacks at the Caesars properties but they choose other places to meet even if Caesars properties are all around. I’ve been a supporter of Caesars properties since Atlantic City was my hub for gambling when I was on the east coast. For the most part, they’ve always treated me well.

While you may think people are choosing the new joints (Cosmopolitan or CityCenter), they aren’t. They are choosing places up and down the strip from Mandalay Bay to the Stratosphere. In the past week I’ve come to Bellagio 3 times. No biggie. I love Bellagio. I’m actually writing this at the sportsbook bar while I wait. Note, there is a pretty big selection of of smaller breweries on draft here. Nice.

Anyway, I love stopping at different casinos to meet people and don’t mind paying for a drink or a meal. I just find it interesting that zero percent of people have cared to visit a single Caesars property when visiting Vegas.

UPDATE: Since I drafted this yesterday, the people I met with let me in on their thoughts (they had no idea about this article). One person was staying at Caesars Palace and said that he didn’t mind staying there when he was alone, but he would never go there with his wife (he had a room in the forum tower that was is major disrepair). The other person was staying at a newer room at Hard Rock and loves the newer room and said he doesn’t visit Vegas unless he’s living it up. Caesars properties don’t do that for him.

Boom: Down Goes Dunes!

In light of the pending implosion of The HarmonVegas Inc. decided to list the Top 10 Vegas Strip Hotel implosions. I love implosions and figured this was a good excuse to visit the youtube archives.

For the next couple of weeks I’ll grab video of these 10 Las Vegas Strip Hotel implosions. We’re at the end of the list and at the most engaging implosion – Dunes. The implosion looks like a big party and was topped off with a $1 million fireworks show. If you’re going to get blown up, this is how to do it! This is a great end to the Top 10 Vegas Strip Hotel Implosions.

Opened: May 23, 1955

Closed: Jan. 26, 1993

Imploded: Oct. 27, 1993

With the slogan “The Miracle in the Desert,” the Dunes offered a desert oasis theme and featured a 35-foot-tall fiberglass sultan on its roof. The walls inside the Dunes were slanted, mirroring desert tents.

Through the years, the Dunes continued to add “Arabian Nights” themed elements including an onion-shaped dome. The hotel eventually added performers such as like Aztec Birdman, who performed ritual dances, and flying Indians to perform by the pool.

In 1961, the Dunes added the Diamond of the Dunes, a tower that was the largest in the state, bring the total number of rooms available to 400. In 1976, another 17-story tower was added, which brought the number of rooms to 1,300.

The Dunes hosted entertainers such as Frank Sinatra and offered the first topless revues on the strip, known as Minsky’s Follies.

In 1987, Japanese millionaire Masao Nangaku purchased the resort for $155 million. Nangaku could not make the Dunes successful and in 1993, sold it to Steve Wynn’s Mirage Resorts Inc. for $75 million. It was ceremoniously imploded on Oct. 27, 1993. The Bellagio occupies the site.

Destroyed In Seconds
Destroyed In Seconds

BOOM: Later Landmark

In light of the pending implosion of The HarmonVegas Inc. decided to list the Top 10 Vegas Strip Hotel implosions. I love implosions and figured this was a good excuse to visit the youtube archives.

I’ll grab video of these 10 Las Vegas Strip Hotel implosions, but we’re almost done. 🙁 We go to #2 on the list – The Landmark.

Opened: July 1, 1969

Closed: Aug. 8, 1990

Imploded: Nov. 7, 1995

In 1961, Frank Carroll purchased a vacant lot at Paradise Road and Convention Center Drive with the hope of building the Landmark. Carroll’s dream would not be completed until 1969, after a long series of mishaps.

Carroll began construction when he received a $300,000 loan from a credit union. He hired California contractors to oversee the original 15-story project, and later doubled the size to 31 stories. The tower was 365 feet tall. In 1962, after being denied additional funding from the credit union, construction stopped and the building sat empty, just 80 percent complete.

Construction resumed in 1966 after a four-year hiatus when $5.5 million was loaned to Carroll by the Teamsters Union Pension Fund. The tower was to be completed in 1967 and opened on New Year’s Eve of that year. However, Carroll once again ran out of money.

He pushed back opening date until Howard Hughes purchased the Landmark in January 1969 and agreed to pay off Carroll’s loans. The hotel opened July 1, 1969, but couldn’t break out of its financial hole.

In 1970, when Hughes left Las Vegas, control of the Landmark passed to Summa Corp., resulting in a $5.9 million loss.

The Landmark passed from owner to owner suffering further financial loss. Still, it was featured in hit movies such as “Casino” and “Diamonds are Forever,” and hosted famous entertainers, including Frank Sinatra and Elvis Presley.

After the start of the megaresort era of Las Vegas, the Landmark became too expensive to keep open and it closed Aug. 8, 1990.

The Las Vegas Convention and Visitors Authority debated the future of the Landmark, which remained vacant in 1994. Some wanted to restore the casino and others wanted to demolish it. Those in favor of demolition won. The Landmark was imploded Nov. 7, 1995. Footage of the implosion used in the film, “Mars Attacks.” The property ended the way it began, as a vacant lot, now housing overflow parking for the Convention Center.

Destroyed In Seconds
Destroyed In Seconds

BOOM: So Long Sands

In light of the pending implosion of The HarmonVegas Inc. decided to list the Top 10 Vegas Strip Hotel implosions. I love implosions and figured this was a good excuse to visit the youtube archives.

For the next couple of weeks I’ll grab video of these 10 Las Vegas Strip Hotel implosions. We go to #3 on the list – The Sands.

Opened: Dec. 15, 1952

Closed: June 30, 1996

Imploded: Nov. 26, 1996

The seventh resort on the Strip opened Dec. 15, 1952. It was designed by architect Wayne McAllister.

The Sands opened with only a few hundred rooms. Through the years, it passed through the hands of several Las Vegas land tycoons, including Howard Hughes, who purchased it in the mid 1960s. Hughes added an iconic 500-room circular tower designed by architect Martin Stern Jr.

Other owners included Howard Hughes, who purchased it in 1988, and, in 1989, the Interface Group, which included Sheldon Adelson.

The original “Oceans 11” movie was filmed at the Sands in 1960. The film — including Frank Sinatra, Dean Martin, Sammy Davis Jr., Joey Bishop and Peter Lawford — inspired a meeting, known as the Summit at the Sands, and united the stars, known worldwide as the Rat Pack.

Along with “Oceans 11,” the Sands was featured in “Con Air” and “The Cooler.” In 1996, Adelson closed the famous resort and imploded it to make way for the Venetian.

 

Destroyed In Seconds
Destroyed In Seconds

Boom: Hacienda Implosion

In light of the pending implosion of The HarmonVegas Inc. decided to list the Top 10 Vegas Strip Hotel implosions. I love implosions and figured this was a good excuse to visit the youtube archives.

For the next couple of weeks I’ll grab video of these 10 Las Vegas Strip Hotel implosions. We go to #4 on the list – The Hacienda.

Opened: June 1956

Closed: 1996

Imploded: Dec. 31, 1996

Built on 48 acres, the Hacienda had 10 buildings and started with 240 rooms. It was remodeled in 1975 and expanded in the early 1990s to 1,140 rooms to compete with booming megaresorts nearby. During its first couple of years the casino remained closed for lack of a gaming license.

Just two miles from McCarran International Airport, and for most of its years the first hotel on the highway from Southern California, it attracted an ample amount of tourists but remained somewhat solitary until the 1970s.

The Hacienda was known for family entertainment and featured miniature golf. Owner Warren “Doc” Bailey wanted to have something that kept children occupied while their parents gambled. In 1960, Bailey purchased eight small passenger airplanes for $2 million to provide customers with a package deal that would include airfare and hotel stay. In the 1970s and 1980s, tourist traffic grew for the Hacienda, due in large part to its location at the southern end of the Strip.

In its heyday, the Hacienda showroom launched Lance Burton‘s career and featured comedian Redd Foxx. Even with star attractions and a family-oriented environment, the Hacienda could not compete with the flashy resorts that grabbed tourist attention. The hotel was imploded on Dec. 31, 1996, to make way for Mandalay Bay.

The neon horse and rider from the old Hacienda sign now decorates the intersection of Fremont Street and Las Vegas Boulevard in downtown Las Vegas.

Destroyed In Seconds
Destroyed In Seconds