Nov 15 2008
Streamline Tower Condos in Las Vegas - Boom or Bust?
Several buyers of the luxury Streamline Tower Condos in downtown Las Vegas are facing an interesting, or more like unfortunate, problem. The condos are no longer worth anything close to what they need to be sold for. The question is, whose fault is it?
On October 1, 2008, 48 buyers filed a breach of contract lawsuit in Nevada District Court against Streamline, LLC and Executive Locations, LLC. One of their main allegations seems to be that Streamline misrepresented their ability to be able to lease the condos out for a rate of $3,500 per month. They are trying to terminate their purchase agreements and get back their deposits ranging from $30,000 to $90,000 each.
The Streamline Tower Condos are part of many ongoing project to basically “remodel” downtown Las Vegas which, let’s face it, has pretty much been the pits for as long as I can remember. Fortunately Mayor Oscar Goodman has been very aggressive about cleaning up downtown and part of that redevlopment project has included some really nice condos.
Streamline opened May 1st of this year, but the buyers were told it would be open by December 2006. To put it mildly, the housing market has changed considerably since then. It seems like some of the buyers may be involved in the suit to get out their purchase agreements because they are having problems getting a loan now.
The condos are listed on Streamline’s website at prices ranging from $400,000 to over $1 million. I think this excerpt from an article in the October 27, 2008 issue of the Las Vegas Business Press sums up the main problem:
“However, the situation faced by two of the buyers, Violetta and Nathan Mordukhay of Encino, Calif., points to the hurdles posed by the price structure. They agreed to pay $469,900 for a one-bedroom, 832-square-foot unit, but received two appraisals of $355,000 and $386,000 when applying for a loan. The appraisals were conducted in April, but prices generally have continued to deteriorate since then.”
Do the Plaintiffs deserve their money back? Would they be suing if the real estate market was still booming? Did Streamline actually do anything wrong? Is this luxury condo project in downtown just a money pit and everyone needs to cut their losses?
From the same article - U.S. District Court Judge Lloyd George wrote, “The irreparable harm of which the (buyers) complain is conjectural at this point.“
Stay tuned, the next hearing on a temporary injunction is scheduled for November 24th.
