New York hedge fund manager John Paulson and Raintree Investment Corp. have purchased about 875 acres at Lake Las Vegas for $17.3 million, a source familiar with the deal told the Las Vegas Review-Journal.
The land lies in a hilly area on the north shore called Rainbow Canyon. About 565 acres are developable. The city of Henderson in March approved a rezoning that would allow 3,500 homes on the land, which includes considerable shoreline. It's unclear what the new owners plan to do with the site, however.
Housing analyst Dennis Smith of Home Builders Research said roughly $200,000 an acre at Lake Las Vegas - about 10 times the sale price - would have been considered a steal a few years ago, and it might look like a steal again in three to five years.
"It means somebody probably got a hell of a deal on a piece of land," Smith said Wednesday. "It just means somebody's got confidence in Lake Las Vegas. It's good to hear any time a large land parcel gets taken down."
The 3,600-acre Lake Las Vegas, brainchild of deceased developer Ron Boeddeker, was forced into bankruptcy in 2008 after Santa Barbara, Calif.-based Transcontinental Corp. defaulted on a $540 million loan with Credit Suisse, which sold the land to Paulson and Raintree.
Two of the three golf courses closed and only the private South Shores Golf Club remains open for play.
Intrawest Corp. developed the $500 million MonteLago Village with boutique retail shops, restaurants and a small casino.
Ritz-Carlton opened at Lake Las Vegas in 2003, but filed for Chapter 11 bankruptcy in 2008 and eventually closed. Dolce Hotels took over last year and rebranded the 349-room hotel as the Ravello.
The 493-room Loews Lake Las Vegas Resort, originally built in 1999 as the Hyatt Regency Lake Las Vegas, defaulted on a $117 million loan in 2009 and was rebranded as the Westin Lake Las Vegas earlier this year.
Paulson, who became a billionaire in 2007 by betting against the U.S. subprime mortgage market, has in the past few years been buying real estate directly or through his funds. His holdings include properties in Nevada, Colorado, Arizona, California, Florida and Hawaii.
Paulson also holds interest in several other Nevada businesses, including Caesars Entertainment, MGM Resorts International, Boyd Gaming and Allied Nevada Gold Corp.
Some observers see the deal as a vote of confidence in the Las Vegas housing market, which has been battered by foreclosures and falling prices. A shrinking inventory of homes available for sale has sparked a resurgence in new-home sales.
"For us to continue selling new homes, we're going to have to finish developing lots," housing analyst Smith said. "Sooner or later, somebody has to pull the trigger on land. Public builders are looking anywhere they can for affordable land."
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.