Nathan VonGunten is a director at GRS Group. He can be reached at 330.242.1991 or via email at [email protected]
The gaming industry is about to get have one less operator if a mega-deal goes through.
Eldorado Resorts is purchasing Caesars Entertainment Corp. in a $17.3-billion deal that includes cash, stock and debt. The purchase, expected to close during the first half of next year, will give Eldorado about 60 casino-resorts in 16 states, including some of the most-recognizable properties on the Las Vegas Strip, including Caesars Palace and Paris Las Vegas. Meanwhile, as part of the sale, REIT VICI Properties will get three non-Las Vegas assets for $3.2 billion and the first right of refusal for two Las Vegas Caesars assets that could hit the market.
Do to the significance of this transaction, we thought we would take a look at a few REITs involved in gaming, and their performances of late, seeing that the U.S. casino industry last year collected $41.7 billion in revenue, an all-time high and an increase of 3.5 percent from 2017.
VICI Properties
New York City-based VICI owns 23 properties across the country totaling 40 million square feet made up of 15,200 hotel rooms and about 150 restaurants and entertainment venues. The company owns the Caesars Palace and Harrah’s Las Vegas properties, which it leases back to Caesars Entertainment.
VICI’s first-quarter total revenues were down to $214 million from $218.3 million during the same year-ago period, however, net income rose to $150.8 million from $112.1 million. In April it acquired JACK Cincinnati casino for $558.3 million.
MGM Growth Properties
Las Vegas-based MGM Growth was formed as a REIT in 2015 and purchased many high-profile properties from MGM Resorts International, including Mandalay Bay, The Mirage and New York-New York Hotel and Casino. It owns 13 assets in Las Vegas and in other major metros.
MGM Growth reported first-quarter revenue at $196.9 million, up from $186.6 million in the same year-ago period, while net income was $66.4 million, compared to $58.2 million. In April it bought the Hard Rock Rocksino Northfield Park, in Ohio, and renamed it MGM Northfield Park.
Gaming and Leisure Properties
Gaming and Leisure Properties, of Wyomissing, Pa., owns 44 assets in 16 states. Among the brands it owns properties under are Ameristar, Argosy and Hollywood Casino.
GLPI’s first quarter saw a 17.9-percent revenue jump, hitting $287.9 million, but net income dipped 3.9 percent, falling to $93 million. Last October it bough the properties of some of the biggest casino owners: Boyd Gaming, Eldorado and Penn National Gaming.
About GRS Group
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.
Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance. We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.