A formerly mothballed real estate development near the Strip has sold for $117 million.
Wyndham Worldwide Corp. last week sold its partially completed Desert Blue high-rise on Twain Avenue just west of Interstate 15 to clients of global investment manager Guggenheim Partners.
The new owners plan to finish construction on the timeshare building over the next 12 to 18 months and keep the Wyndham brand, Guggenheim spokesman Thomas Mulligan said. He could not confirm whether the tower will continue to be called Desert Blue.
Construction crews already are back to work. On Tuesday, cranes and other heavy machinery were in use, and workers were scattered throughout the tower.
It’s unclear how much money Wyndham spent on the project, or how close the company came to completing it, before the tower was mothballed in February 2009.
But if newly obtained loans are any indication, the new owners face a hefty bill to finish the job. They recently obtained a $75 million construction loan from Fifth Third Bank and a $97 million construction loan from Guggenheim subsidiary EquiTrust Life Insurance Co., according to records from the Clark County Recorder’s Office.
Desert Blue sat unfinished and exposed to the elements for more than four years, but at least one local real estate broker said he expected it to be competed eventually.
Michael Parks, a member of Newmark Grubb Knight Frank’s global gaming group, said the valley’s timeshare market remains strong because vacationers still like the allure of Las Vegas.
He noted, for instance, that Marriott Vacations Worldwide Corp. is adding a third tower to its Grand Chateau timeshare on Harmon Avenue near Las Vegas Boulevard. The 37-story tower is slated to add 223 new villas.
Still, the Wyndham sales price seems high, said Mike Mixer, managing partner of Colliers International’s Las Vegas office. That’s because, as far as he knows, the property is restricted from having a casino on site.
But he too said Las Vegas’ timeshare sector is doing well, and the amount paid to Wyndham must reflect the anticipated future sales.
“Each developer has their own ‘gut check,’ and apparently this buyer has seen enough opportunity ahead to invest at this level,” said Joshua Smith, a consultant in Colliers’ gaming division.
Desert Blue is the latest of several abandoned projects earmarked for revival during the past year.
Last month, developers bought the unfinished ManhattanWest, an office, retail and residential project on Russell Road near the 215 Beltway, for pennies on the dollar and unveiled plans to complete it under a new name, the Gramercy.
In early March, Malaysia’s Genting Group bought the failed Echelon resort on the Strip with plans to turn it into a $2 billion, Chinese-themed mega-resort, Resorts World Las Vegas.
And in September, developers of the Shops at Summerlin said the stalled retail hub is back on track with Macy’s as an anchor tenant.
Wyndham Vacation Ownership, based in Orlando, Fla., announced in April 2008 plans for the almost 15-acre Desert Blue. The initial phase of construction was set to be completed in early 2010 and consist of a 19-story tower with 281 units, including 50 presidential suites.
The project was slated to include another three phases with up to 2,000 units total, President and CEO Franz Hanning said at the time.
But less than a year later, the project was mothballed amid the national economic meltdown.
“We have temporarily suspended construction,” company spokeswoman Lisa Burby said at the time. “This is a temporary situation. Desert Blue remains in our plans. It’s still a priority for us.”
The project, however, sat untouched for years. Clark County zoning officials in 2010 gave Wyndham until May 2013 to revive the project, and crews resumed working at least a few months ago.