Luxe Lofts sale leads condo market revival

When a structure's value drops 80 percent below its construction cost, stalled condominium projects such as Luxe Lofts in Las Vegas find takers, even in the country's most depressed real estate market.

Patrick Humes and David Thurman of Los Angeles-based BondRok Partners bought the unfinished 83-unit luxury condo project in May for $6.75 million and renamed it The Modern.

The bank-owned project at 8925 W. Flamingo Road, once valued at $38 million, was listed for sale in March for $10 million, or about $120,000 a unit. Cost to build was $540,000 a unit, on average.

Model units are expected to be completed by the end of January, with contract sales starting in early February, sales agent Jarrod Meistle said.

Five floor plans range from 1,135 square feet for one-bedroom, two-bath units to 2,700 square feet for three bedrooms and three baths. Prices run $198,000 to $417,000, compared with prices starting in the high $400,000s when the project was announced in 2006.

"No deposits were taken on Luxe, so there were no returns and we don't have to worry about people coming back with a bad taste," Meistle said.

The project was close to being finished with three stories of podium-style steel framing over an underground parking garage when the real estate market crashed. General contractor Oakview Building Consensus filed liens on the property, forcing developer Frank Hamadani to file bankruptcy in August 2009.

Meistle said most of the remaining construction involves putting new stucco on the exterior and building out common areas. All kitchens were already fitted with appliances and European-style cabinets, and most of the flooring is installed.

Because some countertops showed hairline cracks, BondRok will replace them all. Likewise, three windows leaked, so all were replaced.

"The developer didn't want the headaches, and neither do I," Meistle said.

It's not the first stalled Las Vegas condo project to be revived.

Mira Villa condos near Summerlin halted construction in 2008 with the first phase about 85 percent to 90 percent complete. A consortium of lenders including Nevada State Bank, Great Western Bank and Aspen Financial put up
$37 million in postbankruptcy financing to complete the work.

Since accepting contracts in mid-July, Mira Villa has recorded more than
$6 million in sales at an average price of $430,000, said Tera Anderson, sales director for Nexus 30, the company marketing Mira Villa.

Vantage Lofts, on the cliffs below Black Mountain in Henderson, has been drawing interest from investors who may turn the condos into rentals. That happened to Streamline Tower and One Las Vegas after those properties went back to the bank.

Manhattan West, a larger, mixed-use condo project near the Las Vegas Beltway and Russell Road, remains mired in bankruptcy and lawsuits.

A slew of other condo projects announced during Las Vegas' "Manhattanization" craze died before starting construction, including The Mercer, Spa Lofts, Brickwater, Paxton Walk and Promenada at Rainbow.

Housing analyst Larry Murphy of Las Vegas-based SalesTraq said it's "heartwarming" when a project comes back from dead, but he sees risk in bringing additional housing to a market where demand for new product is essentially zero.

He disregards reports of population growth based on census data and surrender of out-of-state driver's licenses, relying instead on Clark County School District enrollment, which has been flat and even declined last year.

"We're selling 4,500 homes a month and 80 percent of them are vacant," Murphy said. "That tells me we're still oversupplied and anyone who puts more inventory on the market right now is going to have a tough time selling them."

Nicole Milner, sales and marketing director for The Modern, said she learned that Las Vegas is not that deep in luxury condo inventory when she was selling Allure on Sahara Avenue.

"It's such a commodity right now," she said. "You've got Mira Villa, Allure, Turnberry, The Martin ... just not that much product out there. Everything else is frozen. Lack of inventory created demand."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.