Several years after The Gramercy’s never-finished condo tower was imploded to cheering onlookers, developers are pushing ahead with plans for more apartments at the mixed-use outpost.
Southern California real estate firms Lyon Living and LandSpire Group recently broke ground on The Highline, a 294-unit rental complex at The Gramercy, on Russell Road just west of the 215 Beltway in the southwest Las Vegas Valley.
They expect to open the project in winter 2023, and its amenities are slated to include a rooftop lounge area, co-working space and a beer garden, according to a news release, which noted future plans include 71 for-sale townhomes and 25,000 square feet of retail.
All told, the new round of construction marks the latest chapter of a suburban real estate venture that already features apartments, offices and retail space, and boasts a very Vegas history.
A product of the mid-2000s bubble era, the complex was left abandoned and unfinished behind barbed wire-topped fencing after the market crashed. It then sold for cents on the dollar to investors who imploded one of its buildings, finished the others and sold the place in pieces for more than $100 million combined.
Lyon managing partner Pete Zak, whose firm acquired The Gramercy’s two apartment buildings and vacant land in 2018, said the existing residential space is 97 percent occupied.
Like other industries, Las Vegas’ rental market faced turmoil and questions after the pandemic hit. Many tenants tapped unemployment benefits, stimulus funds or other relief programs to pay their rent amid huge job losses in casino-heavy Southern Nevada, and government-ordered eviction freezes kept starting and stopping.
But plenty of people also moved to the valley, including from pricier markets, amid widespread work-from-home arrangements, and Southern Nevada has seen continued apartment construction, fast-rising rents and tighter vacancies.
“At the start of the pandemic we noticed a slowdown in rental rates but that quickly changed,” Zak said in an email.
Developer Alex Edelstein envisioned ManhattanWest, as The Gramercy was originally called, to feature condos, restaurants, offices and a hotel spread among 20 acres. He reportedly purchased the site in 2006 for about $30 million and broke ground in spring 2007.
But the economy soon cratered, funding for ManhattanWest reportedly dried up, and Edelstein stopped construction by late 2008, leaving one of many stalled construction sites littering Southern Nevada after its frenzied real estate market flamed out.
Edelstein sold the unfinished complex to The Krausz Companies and WGH Partners for $20 million in 2013 after spending a reported $170 million on it.
The new owners changed its name and completed its two four-story apartment buildings and two four-story office and retail buildings. They also decided the condo tower had to go.
Demolition crews wired the nine-story building with explosives and imploded it in February 2015. The Sunday morning spectacle drew a crowd of onlookers, and bloody marys and mimosas were offered to guests a safe distance from the blast site.
The landlords sold The Gramercy’s commercial buildings, which feature 187,000 square feet of space, to The Koll Co. and Estein USA in 2017 for $61.75 million. Lyon acquired its section for $45.75 million the following year, picking up 160 apartments and 12.6 acres of land and parking lots.
Zak confirmed The Highline will occupy the former condo tower’s footprint.
From big plans to a big flop and then to a big boom, the plot of land is now back to square one as a new building, yet again, gets started.