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Crystals at CityCenter up for grabs

Discussion in 'Casino Industry & Development' started by sammasseur, Feb 20, 2013.

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  1. sammasseur

    sammasseur VIP Whale

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  2. SH0CK

    SH0CK Stylin' and Profilin' Quasi Tech Admin

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    Considering that Simon Malls owns the Forum Shops and the Grand Canal Shoppes and Fashion Show Mall are owned by GGP, it makes sense to sell that mall to a true mall operator. My guess it would be Simon.

    This would really help MGM pay down some debt. A good move in my opinion.
     
  3. 44inarow

    44inarow VIP Whale

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    Not terribly surprising. When the CityCenter concept was first introduced, it sounded like they wanted not just luxury shopping, but also day-to-day retail that would support a residential community. The way it's panned out, though, MGM is basically just operating a high-end mall, and there are companies who are actually in that business and do it better. I kind of wonder who would want it, though; GGP is already pretty heavily invested here, and I feel like Simon Property wouldn't want to risk cannibalizing the Forum Shops.

    EDIT: Looks like I got beaten to this comment!
     
  4. lionelhutz

    lionelhutz Low-Roller

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    it's funny, I remember walking through Crystals (or whatever it will now be called), to get from Aria to LV Blvd, and the only people that were in the place seemed to be in transit from one place to another.
    There was nobody, and I mean NOBODY shopping in any of the stores, and there would be employees of the stores just kind of standing in the entrance ways, looking bored out of their minds.
    it was surreal.

    I understand that Vegas attracts money, and MGM was trying to cash in, but what was the point of opening up a place on such prime real estate where all of the stores and services available were out of the price range of like, 95% of the visitors, and with high-end competition so close by at Bellagio, and Wynncore.

    no wonder it all went to shit.
     
  5. JDinTN

    JDinTN MIA

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    Well that's why it's revenue is only $54 million for the entire year. That doesn't sound like much for a 500,000 square foot property on such an expensive piece of land in the center of one of the biggest tourist destinations in the country -- but I'm no expert on these things.
     
    Last edited: Feb 20, 2013
  6. 44inarow

    44inarow VIP Whale

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    I'm reminded of a great exchange on another board a year or two ago, where for some reason someone started a thread asking how to lose someone following him while in Vegas.

    Someone else responded, "Go to Crystals. The other person there will be your tail. Avoid him."

    It's among my favorite things I've ever read on any message board, Vegas-related or otherwise. Although to be fair, it probably wouldn't be funny anywhere but on a Vegas board.
     
  7. leo21

    leo21 VIP Whale

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    If things I've heard are accurate, Crystals a ton of business catering to high end and probably celebrity shoppers who schedule private appointments and don't want to be seen. Considering the value of that real estate, it's a waste of space if the primary customers don't want to be seen and further evidence that they were damn fools for not putting Aria up front. Right now, it's not a comfortable place even for a window shopper. They do need a more experienced operator in there.
     
  8. JimboS

    JimboS Low-Roller

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    I don't see many people shopping at most high end stores in Vegas but I'm sure a handful of big spenders could easily help pay the bills!
     
  9. PopMegaphone

    PopMegaphone VIP Whale

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    54m is shockingly low.
     
  10. Nevyn

    Nevyn VIP Whale

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    Sounds like a trial balloon. Put the idea of a sale out there and see who calls.
     
  11. gilly from philly

    gilly from philly Low-Roller

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    I bought something in one of Crystals stores last Saturday. I had to wait for someone to help me, as all the employees were busy helping others, and I saw a lot of people leaving with shopping bags from the store while I was there.
     
  12. nostresshere

    nostresshere Mr. Anti Debit Card

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    Really? What store?

    I tend to agree with an earlier poster that the there are two types of people there:

    A) Those in transit
    and
    B) Those that work there.

    Customers are rare. Very rare.
     
  13. gilly from philly

    gilly from philly Low-Roller

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    Tiffany's. It was mobbed, and many of the customers where purchasing items. The Porsche Design store also had quite a few people in it. I do not know if they where buyers or not.
     
  14. vegasqc

    vegasqc VIP Whale

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    I bought stuff there my last few trips.

    I never felt alone in there, of course its not pack like the forum shops but its crowded,they wouldnt stay in business for years if they were losing money.
     
  15. sammasseur

    sammasseur VIP Whale

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    Saying they've been in business "for years" is extremely overstating things. The paint is barely dry. And no matter what the mouthpieces claim, they are struggling. They're completely revamping their official name, website, and marketing campaigns. Stores, restaurants, and nightclubs have come and gone in a short period of time, both inside Crystals and Aria itself.

    http://www.vegaschatter.com/tag/The%20Crystals

    The place is a shiny, cavernous echo-chamber. You gotta love these shops that have hundreds of empty square footage and about 8 items to sell, one staff person glaring from behind the counter, daring you to step inside so she can act like you're bothering her. It's performance art for the rich.

    I wouldn't be surprised if my local Target store has greater gross sales in one week than this entire mall has in a year. There must be a hell of a mark-up for it to continue operating from the purchase of 6 pairs of shoes, 2 dresses and a blouse.

    Typically empty Crystals

    [​IMG]

    Forum Shops at Caesars Palace

    [​IMG]

    Miracle Mile, just across the street

    [​IMG]
     
    Last edited: Feb 26, 2013
  16. Nevyn

    Nevyn VIP Whale

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    Well, if we're going to be technical about it, it has been open for about 3 and a quarter years, and paint dries in a day or so, so if anyone is extremely overstating its you :Þ

    But I get what you mean, as the context he used it in made years sound more like decades.
     
  17. Kickin

    Kickin Flea

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    Its performance is not just poor its extremely poor. If those numbers up-thread are right, its only generating sales of about $108 per square foot (a common measure of retail space performance). That's not only at the bottom end of the range nationwide, its at the very bottom. By comparison the Forum Shops are one of the highest in the country at about $1750/sqft. Just skimming google searches the nationwide average for shopping malls is around $500/sqft and obviously most of that includes retail space on land that is considerably cheaper than the land Crystals is on.

    Whoever buys it is going to buy it for the real estate and to do a big revamp, not to keep it operating as is.
     
  18. sammasseur

    sammasseur VIP Whale

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    They should just knock it down with leftover dynamite from the Harmon Tower implosion and put up a little park with some shade trees. A hot dog cart could make a better profit than Crystals. :evillaugh
     
  19. Nevyn

    Nevyn VIP Whale

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    I think you may be comparing apples and oranges. The numbers you are looking at are revenue per retail square foot, which is basically summing up how desirable a location it is.

    The 54 million is from the article and is the NET revenue. Also, not sure but i believe it is the net revenue to MGM (the owners), and I think the numbers you are quoting are about the revenue brought in by those leasing, but I could be wrong on that second point.
     
  20. Kickin

    Kickin Flea

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    I'm looking at MGM's last 10K and a better breakdown isn't included or I'm not seeing it but Crystals just pays MGM (or the JV) a $3MM/yr management fee and total management and operating fees from all of CityCenter were about $33MM last year. Those are the only revenues I see recorded on it for Crystals and CityCenter as a whole. So I think the $54 million is net revenue or net sales (not net income) which is just sales less discounts of the total retail operations. Also since that seems to be a common retail industry metric it makes sense MGM would only mention that number in a press release versus some breakdown of what they collect as they do in their financials, especially since they still record a net loss on it.

    To be fair though, even if that is the correct number I don't know if they use total square footage or just leasable square footage in that measure so if you took the latter of 329,000 sqft then it works out to $164/sqft. Still bad.
     
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