Resort agrees to sell Grand Canal Shoppes

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LAS VEGAS -- Venetian Resort-Hotel-Casino officials agreed to sell the 500,000-square-foot Grand Canal Shoppes to General Growth Properties, a Chicago-based real estate investment trust, for $766 million.

As part of the deal, General Growth agreed to purchase the multilevel retail space in the Venetian's proposed Phase II resort, whose working name is the Palazzo, a Venetian spokesman said.

According to the terms of the deal, General Growth will pay a 6% capitalization rate on the first $38 million of net operating income and 8% thereafter, which, according to resort officials, makes the total agreement worth $1.4 billion.

The sale was expected to close on or about May 17.

"[The Grand Canal Shoppes] were never meant to be a core business," the spokesman said. "And now we have a development partner for Phase II."

No timeline has been announced for the 53-story project, which, in addition to the new retail space, will feature more than 3,000 suites, six ballrooms, 315 conference rooms and a Canyon Ranch SpaClub outlet, according to William Weidner, president and chief operating officer of Las Vegas Sands, the Venetian's parent company.

To contact reporter Amy Baratta, send e-mail to [email protected] .

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