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LAS VEGAS-The ultimate sale price for the 536,000-sf, Barneys-anchored retail component of the new Palazzo casino resort won’t be known for a few years, but the initial payment was approximately $200 million less than initially expected. Las Vegas Sands Corp., which has sold the retail component to General Growth Properties, said that it received $290.8 million as an initial payment a few weeks ago, well below the $500 million it was expecting as recently as January.

The purchase price will be equal to the property’s net operating income in month 30 of operation divided by a capitalization rate. The capitalization rate is 6% on the first $38 million of net operating income and 8% on the net operating income above $38 million. Given the lease agreements in place, Las Vegas Sands said in January that it expected an initial payment of more than $500 million and total payments of at least $750 million. The cost to develop the Palazzo retail was $580 million, according to SEC filings.

An industry source familiar with the transaction tells GlobeSt.com that the decreased initial payment is due to the fact fewer stores than expected were up and running at the time of the initial close, so their rents were not taken into consideration. As a compromise, the Las Vegas Sands and GGP agreed to revisit the total more often than was agreed to previously. Previously, GGP was to make additional payments based on the property’s NOI in months 12, 24 and 30. Now, the NOI will be reviewed and additional payments (if necessary) will be made in months 4, 8, 12, 18, 24 and 30.

GGP agreed to acquire the Palazzo retail in 2004, at the time it acquired the neighboring Venetian’s 407,000-sf Grand Canal Shoppes, also from Las Vegas Sands. It ultimately paid $776 million for the Grand Canal Shoppes.

When fully up and running, the Palazzo retail will feature more than 60 high-end boutiques, including 20 stores that will be making their Las Vegas debuts. The newcomers include Chloe, Tory Burch, Christian Louboutin, Diane Von Furstenberg, Van Cleef & Arpels, Anya Hindmarch, Poleci, Lambertson Truex, Phillipe Charriol, Edidi, Piaget and Michael Kors. Rounding out the offering will be high-end staples including Ralph Lauren, Jimmy Choo, Piaget, Burberry, Salvatore Ferragamo, Fendi, Bottega Veneta and Montblanc.

The dining options also will be plentiful and high-end. The new restaurants include CarneVino, by Mario Batali; CUT, by Wolfgang Puck; Table 10, by Emeril Lagasse; and Restaurant Charlie, by Charlie Trotter. Additional dining options will include Dos Caminos, Grand Lux Cafe, Jade, Mainland, Morels French Steakhouse & Bistro, Prime Blue Grill, SushiSamba and Woo.

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