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The view of Vegas, from Israel By Michael Rochvarger Segi Eitan, CEO of Property & Building, is upbeat about the prospects of the Plaza. The company she runs hasn't felt the downturn in Europe. At least yet She just came back from Vegas, and the situation isn't anything like what people have been thinking, says Segi Eitan. "I came back from Las Vegas a few weeks ago. I walked along the Strip and saw a thrumming city full of tourists plying the restaurants and entertainment venues. Americans go on holiday in Vegas even during recessions, more than they go abroad. My feeling is that the view from Israel paints the situation in Vegas as much blacker than it actually is," says the chief executive of Property & Building, which belongs to Nochi Dankner's IDB group. Her trip affirmed her optimism about the gigantic project that Property & Building and Yitzhak Tshuva's Elad corporation plan to build in the gambling Mecca of the American West. Advertisement "I am not ignoring reality. I'm aware of the slowdown in Vegas," she says. So far, that slowdown has affected mainly residential construction, and the financial institutions have cut off lending. "We took into account that we may encounter additional financing costs," Eitan says. "But the fact that banks such as Goldman Sachs and Credit Suisse extended our loan by half a year at an attractive interest rate of 6.3% means that they believe in the potential of our project too." That project is an ambitious one. Teamed up with another real estate developer, Yitzhak Tshuva, Property & Building plans to build the most luxurious hotel-cum-casino-cum-luxury residential complex in Las Vegas, at a tremendous investment of $7 billion to $8 billion. The complex, tentatively named Plaza Las Vegas, is going up on the land formerly occupied by the Frontier Hotel, which Dankner and Tshuva demolished in a ceremonial blast. The two Israeli business groups paid $1.1 billion for the land on which the future Plaza is to go up. Recent rumors say this was too much, and that the value of the site has plunged. Eitan hasn't heard those rumors, she shrugs. "I haven't received any indications of that. It's excellently located, like Dizengoff in Tel Aviv, with approved building rights. The plan is progressing on schedule," she says. It's true, she admits, that the environment has turned more challenging and things are moving more slowly. There may be more delays. Do you regret embarking on this venture on the eve of the crisis? Evidently not. "If you want to make money in life, you have to take risks. "There's no such thing as reward without risk. Looking backward is no great trick. I remain optimistic about the success of this project." Yitzhak Tshuva recently said that you received offers to sell the land for more than you paid. "Maybe the Elad group received offers," she says, referring to the privately-held company through which Tshuva is pursuing his end of the deal. "I haven't heard of it." The slowdown in Vegas housing sales is even being felt at the Queensridge Towers project, which Property & Building erected with IDB Development. "That's true. But that's because we won't compromise on prices. These are some of the best luxury apartments constructed in the city. When the storm passes, the apartments will go at the speed of a missile launch." The market is also hearing creaks from the Indian real estate market, where Property & Building is also invested. Is that affecting your plans to invest there with Electra Real Estate? "[Indian] share prices are falling. But the apartments we're building target mainly high-tech engineers. They cost between $100,000 to $120,000. Demand for apartments in India is still tremendous, about 30 million." Property & Building is also active in the real estate sectors of Western Europe - Germany, Switzerland and Britain - which are being shaken hard by the global credit crisis. The value of yield-generating properties has been plunging. How is the situation affecting Property & Building's assets? "We haven't felt any change for the worse. We have quality tenants and financed our acquisitions through long-term non-recourse loans [backed by the purchased assets]. In some of the properties, profits have even improved." Property & Building is sitting on a great deal of cash. Do you plan to take advantage of the pullback in asset prices to buy? "Who says not? We aren't asleep. We're looking at companies and assets, but at this stage, there's nothing concrete requiring disclosure." Meanwhile, on Tuesday Property & Building reported its second-quarter results, and they were not sorry at all. Profit increased 38% year over year to NIS 40 million. For the first half, the company reported a leap of 47% in earnings to NIS 119 million. The boost came from expanding activity and rising income from rent of its properties, housing sales, and the rising fair value of its real estate for investment. But that last increase was offset by a rise in the company's financing costs. Income from rent increased 5% in the second quarter from a year earlier to NIS 130 million, mainly because the company completed some building projects. Income from selling land and apartments soared by nearly 150% to NIS 82 million. Property & Building's total revenues for the second quarter surged 134% from a year earlier to NIS 376 million. It's true that its shareholders equity shrank 12% from the end of 2007 to NIS 2.4 billion. But it's also true that at the quarter's end, it had NIS 2.1 billion in cash. Bookmark to del.icio.us   Poor sports Here are the top 10 excuses for Israel's poor Olympics showing. Kafka the Zionist Remnants of Kafka's estate found in T.A. raise questions of his belief in Zionism.

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