Less than four months after buying the Tropicana Las Vegas and American casino firm Gaming and Leisure Properties Incorporated is now reportedly looking to put the historic Las Vegas Strip venue up for sale.
According to Tuesday reports from the Las Vegas Review-Journal newspaper and southern Nevada television broadcaster KSNV-TV, Penn National Gaming Incorporated sold the 1,470-room property to Gaming and Leisure Properties Incorporated in late-April before leasing it back as part of a $307.5 million deal. This arrangement was purportedly finalized even as Las Vegas was over a month into an almost twelve-week coronavirus-induced shutdown that saw the once tourist-choked city transformed into a virtual ghost town.
KSNV-TV reported that Gaming and Leisure Properties Incorporated is the real estate investment trust (REIT) spun off from Penn National Gaming in 2013 and has yet to settle on a firm asking price for the 35-acre Tropicana Las Vegas. The 63-year-old property is purportedly due to emerge out of its own coronavirus-related slumber from September 1 despite its new owner formulating plans to either find another renter or negotiate an outright sale.
The Las Vegas Review-Journal cited Michael Parks from commercial real estate services firm CBRE Group Incorporated as declaring that the Las Vegas property is currently worth ‘at least’ what it traded for five years ago, which was $360 million, while Penn National Gaming Incorporated can expect to receive a portion of any net profit should a sale be agreed within two years.
Chad Beynon from financial services firm Macquarie Group Limited reportedly told the newspaper that there is likely due to be a number of casino operators interested in purchasing the Tropicana Las Vegas with the eventual asking price likely to be set between $400 million to $700 million.
Beynon reportedly told the Las Vegas Review-Journal…
“Anytime it feels like we’re at the bottom and it’s the end of the world, that’s generally when buyers come out and at least have conversations with the holders of some of these assets.”
Jay Snowden, President and Chief Executive Officer for Penn National Gaming Incorporated, used a mid-April filing to detail that his firm had received ‘unsolicited interest’ in purchasing the ‘extremely valuable’ Tropicana Las Vegas but that it was otherwise engaged in finding the best ways to weather a slowdown in business caused by the coronavirus-induced lockdown.
Snowden reportedly explained…
“We got another call two days ago with interest in potentially acquiring some or all of the landholdings there, so it’s very active.”