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Trump International Las Vegas condo-hotel charms financing help - Say What?

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Services for Real Estate Pros

Trump International, Las Vegas NV Mortgage financing in Las Vegas has been hard to come by in recent months. Single-family home underwriting criteria is tough enough as it is and condominiums are treated with even harder scrutiny. And then there are luxury condo-hotels that standard mortgage lenders don't want to touch today with any length pole. The latter were the darlings of the Southern Nevada condominium developers in the middle of the last decade when they couldn't build them fast enough to meet seemingly insatiable demand. That was then. How quickly real estate markets can reverse themselves is purely extraterrestrial.

Despite the obvious mortgage freeze on high-rise condo-hotels in Las Vegas, the Trump International has managed to secure $190 million from Hypo Real Estate Holdings AG, a German firm, according to Donald Trump. It's going to help him pay down underlying mortgages on the project and avoid a possible bankruptcy. After all, from the 1,282 units in the golden tower only 302 had been sold by the end of February, asserts SalesTraq, so the bottom line is hurting badly.

A large share of the luxury condos at Trump International has been sold but finding mortgage money to close the transactions has been the problem. Perhaps the $190 million could be put aside to provide financing for the time being, until the home loan market thaws. The details of the arrangement are unclear - besides what Trump himself announced - but it's conceivable that at least some of it could be used to expedite sales.

Las Vegas mortgage and housing observers were somewhat surprised that someone would lend money at this stage to a depressed condo market. Either Hypo Real Estate knows something that they don't, or then it's taking an above average risk with its funds. Or it feels to be strong enough right now to take a long-range view and can afford to wait until the situation returns to normal. Which it will eventually do. One day Trump International will be one of the premier high-rise condo destinations in Las Vegas.

As Hypo Real Estate dips its toe in the water, other mortgage lenders undoubtedly are keenly watching. Everybody wants to be in the front end of a turnaround and this development has at least got them talking. It's a small vote of confidence for the Las Vegas condominium segment, and for really the entire housing market here, and could be the stepping stone from which to move on to bigger and better things.

Photo by jimg944

 

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_______________________________________________________________________________

Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comments (9)

John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Esko - The deal may have something to do with who you know.  I'm not in that league.

Apr 06, 2010 09:33 AM
Eva Erdmann
Lion International Inc. - Holiday, FL
interior decorator

Hi Esko,

I remember in year 2004 when I came to Europe and ended up in Poland there were big advertising boards everywhere with Donald Trump's polish ID picture and statement you can get a loan here just showing your ID.I found it funny than,but it looks like it's all the truth,the European banks loaned him the money.

We will see what's going to happen.

Greetings from Poland !

Zijuzijazijana

Apr 06, 2010 09:01 PM
Esko Kiuru
Bethesda, MD

John,

Donald Trump seems to know whose number to dial.

Apr 07, 2010 03:44 AM
Esko Kiuru
Bethesda, MD

Eva,

He sure appears to have the right connections worldwide. Would be nice to have access to his contact list.

Apr 07, 2010 03:45 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Esko: Thanks for the update. It sounds like they're betting on the come which might be a good play if they're patient. Take care.

Apr 07, 2010 04:24 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Uh, wonder if they know that the foreclosures just begun in there!!!

Apr 07, 2010 01:08 PM
Esko Kiuru
Bethesda, MD

Paul,

Hypo Real Estate seems to be rolling the dice a bit here, but sometimes you hit it big that way.

Apr 08, 2010 07:25 AM
Esko Kiuru
Bethesda, MD

Renee,

Yikes, that could hurt. We probably don't know the whole arrangement at this point.

Apr 08, 2010 07:26 AM
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