The development site is located at East Flamingo Road andSwenson Street, adjacent to the University of Nevada-Las Vegas and1.5 miles from both the Las Vegas Strip and the Las VegasConvention Center. The seller is Lehman Bros., which gained controlof the project in October at auction for $55 million afterdeveloper Del American defaulted on its development loan, accordingto county property records. The outstanding balance on the loanstood at between $90 million and $100 million, one local sourcetells GlobeSt.com.

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Earlier this year, Lehman retained the local office of CBRichard Ellis to liquidate the asset, which CBRE began marketing inApril. The marketing brochure does not list an offering price forthe building nearing completion, Bella Venezia I, but says $72million will have been spent to complete it. The units average1,290 sf and the parking ratio is approximately two per unit. Theoffer price for remaining land and entitlements is $44 million($2.75 million per acre), a big discount to its year-old appraisedvalue of $72.5 million ($4.55 million per acre) and approximately$10 million more than was spent to acquire it and prepare it fordevelopment.

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The listing brokers are Geoffrey West, Jeff Swinger, SpenceBallif, John Knott and Michael Parks. West tells GlobeSt.com thatdespite the entitlements the property will support a variety ofuses including luxury apartments or timeshare units--likely resultsfor the building nearing completion because it was originallyintended to be condos and has higher-end finishes. Beyond that, thesite could support a non-gaming hotel or resort, or, due to itslocation next to the University of Nevada-Las Vegas, studenthousing. In the longer term, condos may again become a viable playfor the property, West says.

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"We have had very strong response from major timesharedevelopers, major condo developers and a lot of players on themultifamily side," West says. "No [condominium] units were eversold so the buyer will have a clean slate, a blank canvass withwhich to work."

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The property is expected to be under contract by the end ofJune. The sale is expected to close sometime in the fourthquarter.

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Del American chief executive Christopher Del Guidice acquiredthe property from Nevada Power in May 2003 for about $4 million, aprice reflective of the fact that it was raw land that wouldrequire some $35 million more for flood control, streets andutilities. In 2004, Del American received a $240-milliondevelopment financing commitment from Lehman Bros. and Hypo RealEstate Capital Corp. for Vegas Grand.

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At one time Del American said that 90% of the units had beenreserved. Later, the company canceled all reservations and raisedprices, prompting a class-action lawsuit that was settled in 2006when Del agreed to pay 2.5% of future gross sales into a commonfund for several hundred people who had reserved a unit, accordingto published reports at the time that cited court documents.

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The Vegas Grand site was not the only Vegas property DelAmerican lost last year. At the end of 2004, Guidice paid $50million for a 10-acre parcel at West Flamingo and Hugh HefnerDr.--next to the Palms hotel and casino--with plans for a$500-million, 50-story, 542-unit luxury condo development. It alsodefaulted on that loan, which had about $82 million outstanding,and the property was sold at auction in February 2007 to the lenderfor $65 million, according to property records.

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