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CMA
August 03, 2018  

Banks Finance Vegas Luxury Retail Property

A group of banks has provided $615 million of debt on a newly expanded, high-end retail property in Las Vegas.

United Overseas Bank of Singapore was the lead lender on the floating-rate mortgage, which is backed by 162,000 square feet of space connected to the Wynn Las Vegas and Encore hotels. UOB funded about two-thirds of the loan, while Credit Agricole, Fifth Third Bank and Sumitomo Mitsui Banking split the rest when the deal closed within the last two weeks.

The borrower, a joint venture between Wynn Resorts of Las Vegas and Crown Acquisitions of New York, has almost finished an expansion of the property. Wynn owned the existing 88,000 sf of retail space in the two upscale hotels when it formed the partnership with Crown in late 2016. Crown paid $292 million for a 49.9% interest in that space, and last year paid $180 million for a stake of the same size in the new 73,000-sf component. That section, called Wynn Plaza, is scheduled to fully open in about two months.

The two transactions indicate a combined valuation of close to $950 million, putting the loan’s leverage at about 65% — although the value of the space may have increased since Crown bought its stakes.

The retail space generated stratospheric sales of $3,400/sf last year, up from $3,200/sf the year before and double the figure for another upscale center nearby, the Forum Shops at Caesars Palace, according to a source familiar with the deal. That puts it in the same league as the Shops at Bal Harbour near Miami Beach, Fla., often cited as the top-producing retail property in the country.

When Wynn Plaza officially opens, the combined retail space will have about 50 tenants, including Breitling, Cartier, Chanel, Dior, Hermes, Prada and Stella McCartney. Many of the shops are the retailers’ only presence in the city.