- Tropicana Las Vegas owner says they are in no rush to sell the property though it is in the market
- The property remains shut with its reopening scheduled on September 1
- GLPI had agreed to buy the property from Penn National at $337.5 million
- Some analysts estimate the property would fetch as much as $700 million
Tropicana Las Vegas owner says that there is no rush to sell the primely located property although the casino resort is in the market.
Gaming and Leisure Properties, Inc. (GLPI), the real estate investment trust of Penn National Gaming, in its second-quarter earnings revealed that the property would be carefully divested.
While answering a question on the call, the CFO of GLPI, Steve Snyder, said that the 35.1 acres were Strip frontage and addressing what many termed as ‘Strip proximate’, the CFO said, ‘There’s nothing proximate about being on the corner of Las Vegas Boulevard and Tropicana Boulevard.’ Expounding on it, the CFO said that its proximity was at ‘the corner of Main and Main’.
He said that with the development of the Allegiant Stadium, home to Las Vegas Raiders, it was a matter of exercising patience while Las Vegas tries to get back to normal. For now, Tropicana Las Vegas remains closed with its reopening scheduled on September 1.
Penn National Survival
In April, GLPI had agreed to buy the property from Penn National at $337.5 million. The deal would also see the company acquire the ground lease for the under-construction of Pennsylvania-based Hollywood Casino Morgantown.
The decision to sell the land assets to GLPI was as a result of the COVID-19 effects that saw the closure of casinos across the US. This had seen the operating revenue of Penn National going to nearly zero.
From the deal struck, GLPI had potentially got a bargain in the sale. Penn National in 2015 had paid $360 million for the property and became its first property in the Las Vegas Strip.
GLPI agreement to purchase the property was crucial for the survival of Penn National, according to gaming analysts. The Pennsylvania-based company shares had gone down to $4.50 in mid-March from nearly $40 in February. They have since shot up to nearly $34.
There are varying opinions by the analysts on the amount of money the property can fetch with some estimating a figure going as high as $700 million.
Peter Carlino, the GLPI CEO, said that the company has a ‘valuable piece of real estate’ that they were fairly priced in Vegas. He concluded by saying, ‘We have to wait and see how things settle out.’
GLPI Positive Quarter
While global economies continue to feel the heat caused by the COVID-19 pandemic, it has been a good three-month period for GLPI’s properties. All but one of its tenants had remained current on their rent obligations as reported by the company.
The company’s quarterly operations funds topped the Zacks Consensus Estimate at $0.84 from the estimate of $0.82 per share.
The net income of the company from January through June totaled $209 million which was a rise from $186 million recorded over the same period in 2019. A 21% jump of basic earnings per common share in the second quarter was also recorded to $0.52. Basic earnings for each share totaled $0.97 for the six months.