LOOKS LIKE THE NEW FRONTIER HOTEL IS BE SOLD TO A SOLID HOTEL GROUP

Implications: This is a sensational move on the part of owner Phil Ruffin - he sold his property for an outrageous sum of money. The New York/Israeli group purchasing it did not sneeze at the prospect of over paying for strip property. The impact for the entire strip will be a boost in raw land values. Personally, I thought they were in the high range prior to this deal being made.

Analysis: Phil Ruffin, owner of the New Frontier Hotel on the strip in Las Vegas, must be thinking he died and went to heaven. He was paid about $34 million an acre for his property. One of the highest numbers paid for strip land at any previous sale. This transaction will solidify the high price that will be paid on future projects. Can you imagine the glee from the other property owners in the vicinity - they are probably kissing the ground that their hotels occupy.

This purchase was strictly based on what the developer thinks he can pay for raw land only. They have no intention of running the New Frontier as it now stands. No doubt, they estimated the cost to them on a raw land purchase basis only and what they place on the land to justify the numbers. It was stated that as soon as closing is completed they are planning to take this property down. They are planning about two and a half billion +++ on their project now being called the Plaza. They also own the famous Plaza in New York. There has been no information how this new property will be themed, but at the numbers they are speaking about, you can bet it will catch the eye of the Las Vegas clientele. The Las Vegas Wynn and the new Encore will be directly across the street. This will really help enhance the north portion of the strip that not so long ago was not considered the best buy. It probably also make the new owners of the Sahara sit up and take notice that they will have the only 50+ year old property left on the strip. I know about the Riviera - they are trying to sell and the current Board of Directors have turned down $28.00 and $30.00 a share from a group of disgruntled share holders. Theshare holders have added a few dollars a share and are looking for a buy. If the Board takes into consideration what just happened to the New Frontier they certainly may have second thoughts on the worth of their 27 acres.

This new purchase will impact the strip and move some of the action north. Remember that Boyd group is underway with the Echelon mega resort - MGM/Mirage purchased and now controls about 100 acres from Sahara Avenue south. There are big things in the offing. There seems to be no end of additional room count to the strips already hefty inventory. Can the industry stand more room density? It always has and if the truth be know it would be my guess that we have only scratched the surface for the potential traveler..............