Betting On Condos In Vegas

Janine Hagg owns a successful smoothie shop just outside Las Vegas. Still, with no pension or 401(k) plan to fall back on, she and her husband thought they had a foolproof plan to fund their retirement: CBS News correspondent Sandra Hughes tells how they rolled the dice … on the booming condominium market on the Las Vegas Strip.

"There's so much excitement about what's happening down on the strip," says Hagg. "The buzzword right now is the Manhattanization of the Las Vegas Strip."

With more than 100 condo projects planned, Hagg and her husband got in early; they invested in an apartment before it was even built, hoping to buy low and make money off high rents.

But then construction costs skyrocketed by 30 percent, and projects were stopped — including theirs. Now, Hagg is taking the unusual step of suing the developer who pulled out … for money she would have made on a unit that was never built.

Hagg is sure the deal would have been a money-maker if it had been completed.

"You can watch the increasing of prices," she says. "I believe my unit had appreciated considerably, over $100,000."

Developers were aiming to rebuild Las Vegas. They want to turn it from a casino-hotel town into a second-home condo destination

"Having a good residential environment is going to be just one more thing to attract visitors," says Bobby Baldwin, president of MGM Resorts, one of the city's biggest casino operators.

The MGM Mirage condo venture looks like a winner. The company started early, before the game got crowded, and with its brand name, about 1,500 units are already sold. But Baldwin, who grew up around a poker table, knows the odds in Vegas are usually against the bettor – no matter what the game.

"You need to be loaded for bear when you come to compete in Las Vegas," he says. "Whether you're in the casino business, the residential business or the retail business, it's all the same. The competition is fierce."

It's so fierce that developers have even tried getting celebrities such as Ivana Trump and George Clooney to attach their names to projects. But Trump's project rolled snake eyes — it fell apart. Clooney's isn't doing much better.

" I think that's been about as successful as me acting in movies," Baldwin says.

One little wedding chapel on the Vegas Strip was slated to be demolished to make way for a condo project, until the market softened and developer blew up the deal. He reportedly sold for $90 million … to an even bigger developer. But that developer is placing his bet on a casino project, not on condos.