Las Vegas one step closer to using eminent domain to help its citizens violate contract law and break their promises

What happens in Vegas, stays in Vegas, unless you're talking about their underwater home loans. These are agreements that individuals agreed to pay, they posted collateral, and now the collateral is worth less than the loan they wish to reduce the loan amount... wait, shouldn't they have to post new collateral? The current administration doesn't think so, Bill Gross is unsure at best, and North Las Vegas City Council has signed an advisory agreement with Mortgage Resolution Partners, a hedge fund dressed in sheep's clothing, that includes exploring a plan where the City/County would effectively condemn the mortgages of its citizens, forcing the banks to write them off, and then re-issuing new mortgages to the citizens so they can stay in their homes. Of course these losses will be spread to taxpayers, pensioners, and other investors in the mortgage market all across the country and internationally. Originators will likely never lend in that city again, or at best will certainly alter the language of their docs to prevent such action if it is even legal in the first place.

This type of short-sighted plan is a good reason to fire your local politicians. They're wasting your tax dollars on a plan that does not even pass the smell test, and its going to cost you millions in legal fees before it blows up in their faces.

And MGM/Dubai World Wept (Tears Of Joy?)

"We built in the best of times and opened in the worst of times,” Dennis said in a telephone interview.

For those that follow the saga in Nevada known as CityCenter, a recent transaction reported by Bloomberg may indicate that that this is the beginning of the end.  Either that or Ladder Capital pulled the old Sam Zell and got in at the bottom of this particular market.

1) CityCenter, a $8.5B joint venture between MGM & Dubai World, opens during one of Las Vegas' worst real-estate "downturn".
2) The residential condos at 669 unit Veer Towers initially priced at ~$900+ a square foot.
3) Ladder Capital Finance just bought 427 condos in bulk for $119M, or roughly $300 a square foot.
4) ??????????????
5) Profit

With that being said, the Veer only has about 11 penthouses remaining so make sure you buy before it's too late.

Las Vegas CityCenter Condos Sell in Bulk for $119 Million - Bloomberg

- Jingle Male

CMBS In the News

The WSJ reports on 3 CMBS stories:

Notes the loan is going into a multi-sponsor deal slated for the 2nd quarter.

The owner of the Keystone Summit Corporate Park, private-equity firm Keystone Property Group, recently refinanced the building for $53.5 million, including a $41.5 million first mortgage from Deutsche Bank AG and a $12 million junior loan from Pembrook Capital. What makes this deal stand out is the plan Deutsche Bank has for the first mortgage.

First Ritz to ever default. Ever. Described by a former colleague as 45 minutes into the desert, the middle of nowhere.

The hotel's closure is the latest stumble for the Lake Las Vegas development, which was planned around a manmade lake roughly 15 miles east of the Las Vegas Strip. Developer Transcontinental Corp., led by Ron Boeddeker and Texas tycoons Sid Bass and Lee Bass, began developing the 3,600-acre project in the 1990s to include thousands of upscale homes, three golf courses, a small casino and two resorts. But Transcontinental defaulted on a $540 million loan from lenders led by Credit Suisse and sought Chapter 11 bankruptcy protection for the project last year..

Regarding the MBA default on their building, Petrie calls Kempner a dolt:

The worst part of buying "that stupid office building," Mr. Petrie says, was that it led to emergency cost-cutting that forced the MBA to dismiss some "wonderful people" on its staff. Mr. Kempner, who resigned in 2008, says the board approved the purchase unanimously. "It was not my decision," he says. An MBA spokeswoman declined to comment.

I'm not even going to do an outake of this FT story - the reporter did a poor job writing this up - but maybe this is of interest to someone because it has opinions based on a survey of how various markets will perform (including CDOs and CMBS).

Also in the FT, the Beltway Battle, discusses the attempted takeout by Brookfield for CarrAmerica's DC properties, that Tishman has defaulted on. I initially thought the article was talking about the CarrAmerica portfolios in BALL 2006-BIX1 and CGCMT 2006-FL2, but the addresses listed in the article do not match up.