The announcement that Caesars would look to sell one of its Strip hotel-casinos was the least surprising news to come out of the company’s third-quarter earnings conference call last week.ĬEO Tom Reeg has said as much going back to June 2019, when Eldorado Resorts and Caesars first disclosed their $17.3 billion merger. Bill Hornbuckle, CEO of MGM Resorts International, during a keynote gaming conversation at G2E on Wednesday, Oct.

“The industry continued to move towards consolidation, and many operators, with some notable exceptions, see a Las Vegas Strip property as important for them to be seen as more than just a local or regional player,” Jonas said. “Gaming REITs have enabled all time high valuations on the Strip, which has tempted sellers of both full properties and even operations to sell now,” Jonas told The Nevada Independent. VICI Properties’ $17.2 billion pending acquisition of rival REIT MGM Growth Properties includes eight MGM Resorts-managed regional casinos in seven states along with eight Strip developments – which includes The Mirage. 30, MGM Resorts had $12.7 billion in long-term debt and Caesars had $15.2 billion of indebtedness.Īlso, four of the five deals this year covering Strip corridor properties involve real estate investment trusts and sale-leaseback agreements. Many companies, Jonas said, want to utilize casino sale proceeds to pay down long-term debt, some of which was taken on during 2020 to help fund operations and boost balance sheets during the gaming industry’s COVID-19 closures and subsequent operating restrictions.Īs of Sept. Truist Securities gaming analyst Barry Jonas noted that interest rates are low and capital markets have been accommodating toward gaming industry transactions, both in Las Vegas and regionally. It’s hard to justify the cost of building a new resort with few good plots left, so it’s about trading assets with various market entrants.” I think we are just at the peak of one of those cycles. “There has always been an ebb and flow to the Strip. “Assets are not always available,” Bussmann said.

In a year that has seen more than $30 billion in announced mergers and acquisition activity along the Strip corridor in just 10 months, Global Market Advisors Partner Brendan Bussmann suggested the Strip’s latest acquisition activity will draw the interest of numerous potential buyers. Last week, however, Caesars Entertainment and MGM Resorts International, the Strip’s two largest operators with a combined 17 properties, each said they wanted to part ways with a hotel-casino. High-profile Las Vegas Strip resorts aren’t put up for sale every day.

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