X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-MGM Mirage, Kerzner International Holdings and Istithmar Hotels FZE have agreed on terms for their joint venture development of a multibillion-dollar integrated resort adjacent to MGM’s Circus Circus hotel-casino property at the north end of the Las Vegas Strip. Construction is slated to commence in the first half of 2009 and open three years later.

Kerzner owns the Atlantis properties in the Bahamas and the One & Only-branded luxury hotel chain. Istithmar Hotels FZE, an investor in Kerzner, is a wholly owned subsidiary of Istithmar PJSC, the investment company of Dubai World, a Dubai government entity that recently bought a 50% stake in MGM Mirage’s CityCenter development at the heart of the Las Vegas Strip for $2.7 billion and is acquiring as much as $2.4 billion of MGM Mirage common stock.

Per the development agreement for the North Strip site, MGM Mirage will provide the land for the multibillion-dollar integrated resort and retain a 50% stake while Kerzner and Istithmar provide cash equity in exchange for 25% stakes. The land being contributed by MGM Mirage–40 acres, most of which it acquired earlier this year–is being valued at $20 million per acre.

Kerzner will lead the planning and conceptualization of this project. The new resort will front the corner of Las Vegas Boulevard and Sahara Avenue, across Las Vegas Boulevard from the Sahara Hotel & Casino, which was recently sold for between $300 million and $400 million to a new ownership group that plans to renovate and revitalize the 55-year-old, 1,700-room property.

MGM Mirage and Kerzner signed an LOI to form the joint venture in June , one month after MGM paid two different owners $576 million, about $17 million per acre, for 33.5 contiguous acres that abut MGM’s existing assets there as well as Las Vegas Boulevard. MGM chairman Terry Lanni said at the time that the partnership is a way for the company to leverage its land and development experience and accelerate growth while conserving capital for additional opportunities. “We see this type of relationship as a major part of our company’s future,” he said.

All told, MGM now controls along Las Vegas Boulevard 865 acres with three miles of Strip frontage, cementing its position as the area’s largest landholder. Its largest current project is the $7.4-billion CityCenter project, which got under way this time last year. Located between the Bellagio and Monte Carlo resorts, the first phase of the development will include a 4,000-room luxury hotel and casino, two 400-room non-gaming hotels, 2,900 condominium units and 500,000 sf of commercial space.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE 2020Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt. Apartments 2020Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.