Las Vegas Review-Journal (Sunday)
NYC boom reminds of LV bust
Manhattanwest project faltered in recession
When the developer of New York City’s Manhattan West announced the project’s debut last year, it touted the luxury apartments, modern offices and variety of retail in the multi-tower complex.
It also forged a link — in name only — to one of Las Vegas’ visible real estate busts from the Great Recession.
Las Vegas’ Manhattanwest complex, a product of the mid-2000s bubble, was slated to feature condos, retail space and more. But the developer stopped construction as the economy cratered, and after the project collected dust for years, new investors bought it, renamed it, finished it, filled it with tenants and sold it off in pieces.
New York City’s Manhattan West and Las Vegas’ former Manhattanwest have no connection beyond their names. They had different developers, one of whom actually built their project in Manhattan while the other never finished his project in the Las Vegas suburbs.
Still, the New York City complex’s name rekindles memories of Las Vegas’ go-go days, when developers, backed by easy money, flooded Southern Nevada with big construction projects some 15 years ago — only to see the market do a face-plant.
In New York, real estate giant Brookfield Properties announced the opening of its $5 billion Manhattan West complex in September 2021. The project, as its name implies, is on the west side of Manhattan.
The 7 million-square-foot project features office buildings, a residential tower, hotel, and ground-floor retail with tenants including Whole Foods Market, an NHL flagship store, Peloton showroom, and coffee shops and restaurants.
The residential tower is virtually fully leased; the project’s first office skyscraper is 98 percent leased; the retail space is almost fully leased; and an office tower opening next year is 76 percent pre-leased, according to Laura Montross, director of communications at Brookfield.
Montross also confirmed that until the Review-journal contacted Brookfield for this story, she had never heard of Las Vegas’ Manhattanwest.
‘Frothing’ developer
After working in the 1990s and early 2000s for tech companies including Microsoft and Netscape, Alex Edelstein got in on Las Vegas’ real estate market.
He developed the Manhattan condo complex south of the Strip, selling out its initial 700 units. He also launched Manhattanwest, a mixed-use project on Russell Road just west of the 215 Beltway in the southwest Las Vegas Valley.
He reportedly purchased the Manhattanwest site in 2006 for about $30 million and broke ground in spring 2007. Project plans called for 600-plus homes as well as restaurants, office space and a hotel.
Soon enough, Las Vegas’ once-booming real estate market was sliding. In mid-2008, Edelstein announced a new blog, Frothing developer, saying it was “designed to counter the media’s perennially negative spin on the economy and the housing market.”
“I love the smell of recession in the morning,” Edelstein joked in a June 2008 news release. “The greatest opportunities come when everyone else is paralyzed by fear, particularly when I know that fear is irrational.”
By late 2008, however, the economy was crashing, and Edelstein stopped construction on Manhattanwest. At the time, he said funding for the project was no longer available, the Review-journal reported.
“We are very sorry to have to suspend construction,” he said. “We are looking for ways to finish it. We’re going to try and get it done.”
Manhattanwest — one of many abandoned projects to litter Southern Nevada after the bubble burst — was for years a visible failure. Its unfinished buildings sat behind barbed wire-topped fencing, with its nine-story condo tower showing exposed floors and only partially covered by blue-colored glass panels.
Edelstein sold the property in 2013 to The Krausz Companies Inc. and WGH Partners for $20 million, after spending a reported $170 million on the project.
He did not respond to a request for comment for this story.
‘It was like a war zone’
The new owners changed the project’s name to The Gramercy 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, imploding it in 2015 at an event offering bloody marys and mimosas to guests a safe distance from the blast site.
They ultimately sold The Gramercy for more than $100 million. The Koll Co. and Estein USA bought its office buildings for $61.75 million in 2017, and Lyon Living acquired the apartment buildings, vacant land and parking lots for $45.75 million in 2018.
Last year, Lyon and partners broke ground on a new apartment project on the former condo tower’s footprint.
In New York City, Manhattan West is a cluster of high-rises, restaurants and retail. Ben Brown, managing partner of Brookfield’s real estate group, said in a news release last year that the project would “contribute to the energy and dynamism” of New York as the city “continues to come back to life.”
In Las Vegas, The Gramercy offers housing, offices and retail space with such tenants as DW Bistro and Pinches Tacos. But years ago when it was still Manhattanwest, the project looked a bit different, as Ofir Hagay, who was part of the group that bought it from Edelstein, once recalled.
“It was like a war zone,” he said.