Well, a billion isnt what it used to be
Posted on 01/17/2008 9:54:48 AM PST by BurbankKarl
The credit crunch that roared through the residential real-estate market is starting to bite commercial projects, too.
Yesterday, Ian Bruce Eichner, the developer of a twin-tower casino resort in the heart of Las Vegas, defaulted on a $760 million loan from Deutsche Bank AG after he failed to get refinancing. The default on the loan supporting the $3 billion Cosmopolitan Resort Casino is a signal of trouble for Mr. Eichner, who gained notice during an earlier real-estate downturn in the early 1990s when he lost several projects in New York City.
Mr. Eichner yesterday received a notice of default on the $760 million loan, which came due Tuesday. He had failed to obtain refinancing to pay back the loan. The default triggered technical defaults on additional debt totaling $175 million.
Mr. Eichner may still succeed in finding new investors, something he has been struggling to do for weeks. Work is continuing on the 3,000-room casino and hotel, which is scheduled to open in late 2009, according to a spokesman for the casino. He said he didn't know whether it would be halted by the default action.
Mr. Eichner released a written statement blaming "current challenges within the real estate and debt capital markets which are out of our control." The statement said he is working with Deutsche Bank and Merrill Lynch & Co. on raising new equity. "This action by our lender comes as no surprise," the statement said. Representatives of Deutsche Bank and Merrill Lynch declined to comment.
The Cosmopolitan includes 2,184 "condo hotel" units, which are condominiums that typically get rented out as hotel rooms. During the housing boom, speculators in cities such as Las Vegas, Miami and San Diego snapped up these units because they promised to rise in value while also producing rental income.
(Excerpt) Read more at online.wsj.com ...
Well, a billion isnt what it used to be
Translation to investors: It's not MY fault!
I saw this article earlier. Any chance someone like Wynn snatch this up for less than market? What a prime piece of the strip!
dang.. What’s an inch of real estate worth these days near the strip?
Some of the articles I have read recently in the European press question whether Europe needs to worry about what happens in the US economy. In fact EU central bankers are thinking of raising interest rates over there to make sure inflation doesn't get going strong.
Some in the financial markets are asking why the EU central bankers are planning on doing the complete opposite of the US Federal Reserve system. The usual answer is that the European economy isn't dependent upon the US economy since Europe exports so much to Asia these days.
My feeling is that if some of the major European banks have huge write-downs based on what is happening in the US, such as this commercial property bankruptcy, then there may be some concern for what those banks can lend to support the EU economy.
Just a thought.
It's never the CEO's fault. It's always "consumers failed to...", "changing markets reduced our...", etc. It's the typical prose of every quarterly report ever written.
Interesting story about the health of some EU banks...
http://www.freerepublic.com/focus/f-news/1955533/posts
It’s never the CEO’s fault. It’s always “consumers failed to...”, “changing markets reduced our...”, etc. It’s the typical prose of every quarterly report ever written.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.