Deutsche Bank to Foreclose on $3.5 Billion Casino

Source: Bloomberg

Aug. 7 (Bloomberg) -- Deutsche Bank AG will foreclose on the $3.5 billion Cosmopolitan Resort & Casino in Las Vegas after developer Ian Bruce Eichner defaulted on a $760 million loan, two people briefed on the situation said.

Germany's biggest bank weighed selling the complex after Eichner's January default, said the people, who asked not to be named because the discussions are private. Deutsche Bank will take over the Cosmopolitan and is talking with companies including MGM Mirage and Hilton Hotels Corp. to help run its 80,000-square-foot casino, the people said.

Sagging commercial real estate prices, weighed down by record subprime defaults, forced banks to hold projects until prices rise or sell at a loss. The Frankfurt-based bank would oversee an 8.5-acre development with two high-rise towers, three wedding chapels, a sandy beach overlooking the Las Vegas Strip and a deck featuring ``European-style bathing.''

``Deutsche Bank wants to be engaged in banking, not running a casino,'' said Matthew Clark, a London-based analyst at Keefe, Bruyette & Woods. ``They've had to decide between selling the Cosmopolitan into a bad market or holding on for better times.''



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=alpUP8xoYnJE

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Las Vegas is in VERY bad shape.

The place where that's being built is where the last casino I worked at used to stand.

Serves them right. They should have kept that little low-limit dive. At least it made a million a month in profit.

I was there in December-that was an ENORMOUS structure.

I'm pretty sure you're talking about the World Market Center, and no... not the same thing.

The World Market Center, http://www.lasvegasmarket.com/, was getting ready to start construction on their largest building yet and it was just released that they are delaying the construction due to the economy however no such news of any foreclosure with them.

http://www.lvrj.com/business/25794879.html

It's been a few years since I lost touch with Vegas, but the CityCenter is totally different than the World Market Center. I learned something new today. I attached an article from 2007 that talks about the groundbreaking for the Cosmopolitan and its actually pretty interesting seeing their enthusiasm about this new casino back then compared with the doom and gloom of today's economy. How quickly things can change.

Again... sorry for jumping the gun on that :)

Good casino.

I worked at the Boardwalk. Most people walked past it and thought it was just a strip mall. Others saw the prop "roller coaster" up on the roof and wanted to know where the kiddie rides were.

We were one of those joints that only opened up $25 tables for "high rollers" and on New Years' Eve or Super Bowl Sunday, and then only one or two.

Fighting chance.

http://www.citycenter.com/

MGM Mirage is building that... This failing casino is owned by somebody else.

The inclinators are all in dire need of refurbishment, the rooms we got (they moved us because we complained about the first) were pretty much nasty.. I did not have a good experience with them this time. Looking at the outside of it closely, it appears the glass windows are slipping downhill, unevenly, over time. Same with the 7th floor walkway around the inside, to the rooms. The one spot an interior structure contacted the walkway, it was fine, but the rest of it was sagged about an inch. It was quite disturbing.

Needs a major renovation.

...That's based on an 8.5% annual commercial loan rate. It could have been way higher

most of them are bundled paper from banks or other lenders in the usa. wells fargo is the other big holder of defaults. only a few defaults are on the books of our local savings and loans or other national banks..

there is some satisfaction knowing these guys in germany were conned

Sometimes, running a casino is the same as running a bank.

And either way, the House wins. Until it loses all.

is sinking fast!

I work (occasionally) at a casino. They're a license to print money. Thousands of grandmothers sitting at the slots feeding coins and bills until they can't raise their arms. They have to wear gloves to keep their hands from chafing.

They admit right up front that you can't win.

http://www.forbes.com/feeds/ap/2008/08/08/ap5304696.html

A casino is like any business: you have to make more money than you spend, if you do the reverse then you lose money.

I say we ought to bail that poor owner out at taxpayer expense - I bet he was taken in by one of those awful multi-page mortgage documents that nobody could be expected to comprehend prior to signing! SLIMY LENDERS forced this upstanding citizen into a loan THEY KNEW he couldn't afford! Bankrupt the banks! Free casinos for everyone!