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You may have read about condominium cancellations in the otherwise white-hot Las Vegas high-rise market. Casualties include a well-publicized building promoted by Ivana Trump, ex-wife of The Donald. A new report from Deutsche Bank gaming analyst Marc Falcone puts the Sin City construction market in perspective. Falcone says that while 8% of announced units have been cancelled, he still tallies up 93 projects in development, accounting for nearly 55,000 new rooms. About 40% of those are condo hotels where individual owners buy the units. Falcone figures only about 20-30% of the announced projects will get built. Dick Rizzo, chairman of Perini Building Co., a big Vegas contractor, told listeners in a Deutsche Bank-sponsored conference call that sharply higher construction costs will put the kibosh on all but the highest-end projects. Rizzo says he can’t charge less than $400 a square foot for new high-rise construction, and that means developers have to ask condo buyers for at least $800 a square foot to make a profit. The Donald’s project, on the Strip next door to the Fashion Center mall, already has five floors up, however. Don’t bet against that man.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.