Cosmopolitan settles with condo buyers
In the first class-action lawsuit settlement of its kind on the Las Vegas Strip, the Cosmopolitan has agreed to refund most of the deposit amounts people put down on more than 1,400 condo-hotel units.
Plaintiffs are getting roughly 62 percent of their deposit money back, an average of more than $120,000 for each unit after attorney fees are paid, according to local news reports.
The settlement is drawing the attention of buyers, real estate agents, attorneys and industry experts because lawsuits against other condo developers are in the works. Basically, investors say they were misled by zealous sales pitches during the pre-recession years of Las Vegas real estate euphoria.
The Cosmopolitan settlements - higher than some recent offers extended to frustrated CityCenter buyers - could establish a precedent in Las Vegas, real estate experts say.
In recent days, some CityCenter buyers have received letters from MGM Mirage offering to let them out of their contracts and to return 25 percent of their deposit money. The settlements, the last of which were approved this week, come as MGM Mirage begins closing escrow on condos at Mandarin Oriental and Vdara. The closing process for the twin-tower Veer condos is expected to begin next month.
As of late last week, 31 of Vdara’s 1,495 units had closed escrow at prices ranging from $370,000 to $871,000, according to news reports. At Mandarin, 24 of 225 units have sold at prices ranging from $1.05 million to $7 million.
People who put down deposits but have not closed at CityCenter have various demands. Several are willing to close on their units but at deeper discounts than the 30 percent price cut offered in the fall. Others want out of their contracts and want their deposits back. Even with a 30 percent discount, condo buyers would still be paying 172 percent to 344 percent of average market prices in Las Vegas, according to a recent report by investment analysts Union Gaming Group.
The long-delayed $3.9 billion, 2,995-room Cosmopolitan is now set to open in December but with about one-third of its rooms delayed to next July.