Real Estate Roulette

A $750 million expansion project under way at The Hard Rock Hotel & Casino in Las Vegas, along with several other Sin City developments in the works, has some area analysts speculating the market just won’t be able to keep up.

“It’s [the] wrong place, wrong time,” said Randy Fine, founder of casino marketing and consulting firm Fine Point Group. “They want to turn a boutique property into a mega-resort. This is probably not the time to be doing that.”

The Hard Rock expansion includes its newly opened concert venue along with the Paradise and another tower that would have 340 rooms and casino space.

Also under construction is the $8.5 billion CityCenter project – a partnership between MGM Mirage and Dubai World – which is planned for six towers and 6,000 rooms. The Cosmopolitan next door is reportedly scheduled to add about 3,000 rooms by 2010.

And those numbers don’t include projects that have stalled or been halted, such as the Fountainbleu Las Vegas, which has some analysts, such as Union Gaming Group founder Bill Lerner, saying enough is enough.

“Our view is one more room in Las Vegas right now is too much,” Lerner said. “I understand someone carving out a niche but it’s seemingly impossible to overcome the downward pressure simply from just more supply.”

Even billionaire Robert F.X. Sillerman, who may seem to turn any deal into gold, has seen the writing on the wall.

Sillerman’s plan to build a $475 million, Elvis-themed Las Vegas hotel through his FX Real Estate has bit the dust.

“The plans for the Elvis Presley Hotel and Casino has been canceled,” FX Real Estate CEO Paul Kanavos told the New York Observer. “Las Vegas is in a depression and I do not think there will be any need for additional hotel rooms in the city for at least the next five to seven years.”

Sillerman told the weekly newspaper he is getting out of the real estate business altogether. He’s stopped building a luxury golf resort on the Caribbean island of Anguilla amid lawsuits. The billionaire and former SFX chief has spent a reported $180 million on the project and $200,000 monthly watering the Greg Norman-designed course.

“I was originally asked to invest somewhere around $15 million,” he told the Observer, “but since then I have put in about $200 million of my own money just to keep it going.”

He added, “I think I have shown conclusively that I am not knowledgeable enough about the real estate business. … I think should leave it to other people to pursue.”