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Invesco/Simon Venture Acquiring Luxury Mall On Las Vegas Strip for $1.1 Billion

Sale of The Shops at Crystals Underscores Dramatic Reversal of Fortune For Once-Struggling $9 Billion CityCenter Development Project
March 21, 2016
MGM Resorts International (NYSE: MGM) and an affiliate of Dubai World have agreed to trade The Shops at Crystals, a 324,000-square-foot upscale shopping center on the Las Vegas Strip, to a venture led by Invesco Real Estate and Simon Property Group for $1.1 billion.

Simon (NYSE: SPG) and Invesco (NYSE: IVZ) will acquire the 350,000-square-foot trophy center in the 4,000-room Aria Resort and Casino near the entryway of MGM’s CityCenter mixed-use development. The sale by the joint venture of MGM and Infinity World Development, the real estate development arm of Dubai World, one of the world’s largest sovereign wealth funds, is expected to close in the second quarter.

The purchase gives SPG, which already owns The Forum Shops at Caesars Palace, Las Vegas North Premium Outlets and Las Vegas South Premium Outlets, a retail anchor on the south end of the Strip.

"The acquisition of The Shops at Crystals provides us with an extraordinary opportunity to obtain a high-quality asset in a growing marketplace," said SPG Chairman and CEO David Simon.

The Shops at Crystals is anchored by 10 luxury flagship stores, including Louis Vuitton, Gucci, Dolce & Gabbana, Tom Ford, Prada, Fendi and Tiffany & Co., as well as 30 other luxury retailers including Celine, Saint Laurent and Richard Mille.

The retail center, along with the 392-room Mandarin Oriental hotel and the 669-unit Veer Towers condominium project, opened as part of the CityCenter colossus during the throes of the economic downturn in late 2009. The $9 billion CityCenter, the largest privately funded development in U.S., was the subject of lawsuits over cost overruns and construction defect as the declining fortunes of Las Vegas nearly forced the project into bankruptcy.

By mid-2013, travel and tourism to the Strip had begun to rebound and CityCenter began posting consistent positive cash flow. The mix-use project is 50% owned by a wholly owned subsidiary of MGM Resorts International and 50% owned by Infinity World Development Corp., wholly owned subsidiary of Dubai World.

"Las Vegas has experienced significant economic growth over the past few years, with a record number of visitors in 2015 and an increasing international clientele," said Michael Zietsman, director at JLL, which represented CityCenter Holdings, LLC, the MGM/Dubai World venture. "Visitors now spend more than half their travel budget on non-gaming expenditures. A sale like this has never made more sense."
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