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Tropicana's New Owner Says To Wait For Next Move

Monday, August 2, 2021   /   by Ken Couture

Tropicana's New Owner Says To Wait For Next Move

Tropicana's new owner says to wait for next move.png
The senior real estate fund executive, who owns the land where Tropicana is located, did not say what the upcoming development plans are for the 64-year-old resort, which has 1,470 rooms in one of the corners. most remote that the hotel frequents city.

Peter Carlino, CEO of Pennsylvania-based Gaming and Leisure Properties Inc., told analysts on Friday's earnings conference call that his team is working with executives at Bally's Corp. terms of long-term plans for the 35-acre Tropicana Avenue and Strip resort.

Bally's Corp. has an affiliation with Major League Baseball, including broadcast rights to several teams, including Oakland A`s through a partnership with Sinclair Broadcasting Group. Person A saw Las Vegas as a potential resettlement destination.

Penn National Gaming Inc., of Wyomissing, Pa., Affiliated with Gaming and Leisure Properties, is the seller of Tropicana and owns and operates the M Resort in Henderson.

The transaction is expected to close in early 2022.

Providence, Rhode Island-based Bally’s Corp. is not affiliated with the Bally’s resort on the Strip.

In response to an analyst's question, Carlino hinted that there will be more Tropicana news - but not now.

“There is potential for more assets at the site,” Carlino said. “I don’t think we or even Bally’s knows what ‘more’ is right now. Frankly, we’re working cooperatively with them to see how we can maximize whatever occurs there. We are considering the maximization of every inch of that property. That’s as much as I can say for the moment.”

But that actually wasn’t the last thing he’d say about it.

“I wouldn’t assume that the deal we have announced is all that you’re going to see coming out of it. Time will tell. We’re very anxious to build our relationship with Bally’s. They’ve been terrific to work with to date, but I don’t think they’ve refined what they want to do. We’re helping in that process to figure out how we can get the best use of that site,” Carlino said. “I think (we’ve) used the term ‘Stay tuned’ (earlier in the call), and I would say stay tuned on that one as well.”

The Tropicana site is already a possible site for a Major League Baseball stadium for Oakland A if the team moves to Las Vegas.

Soo Kim, a hedge fund investor who is now chairman of Bally's board, said in May he had not heard from Oakland A chairman Dave Kaval but would be happy to speak with him if he called. Kaval didn't specifically mention Tropicana in interviews with ReviewJournal.

“We are very creative and there are 35 acres (at the Tropicana),” Kim said in May. “I actually don’t know how many acres it takes to host a baseball stadium so it’s hard for me to comment on this. But Vegas is an important market on several fronts. It’s also fast-growing and dynamic, which is what sports teams like.”


Shining results

Gaming and Leisure Properties announced record results for the second quarter, which ended June 30.

The company reported a net profit of $ 138.2 million, 59 cents per share, on revenue of $ 317.8 million. In the same quarter a year earlier, GLPI posted a net income of $ 112.3 million, 52 cents per share, on revenues of $ 262 million.

In May, GLPI’s board of directors agreed to pay a 67-cents-per-share dividend to shareholders of record on June 11. The dividend was paid on June 25.

Joe Greff, a game analyst for J.P. New York-based Morgan praised GLPI's business model in a note to investors on Friday.

“We continue to like the stability of GLPI’s triple net lease (real estate investment trust) business model and its attractive, safe, and likely growing dividend,” Greff said in the note.

“This should make for an attractive risk-reward in a risk-off market for our coverage universe, which we note has sold off on three investor concerns relating to the sustainability of strong top-line trends and elevated margins relative to pre-pandemic levels, spikes in Delta variant infection rates, and recent mask mandates, and a general risk-off market particularly about “re-opening” sectors such as gaming.”

GLPI stock rallied sharply in after-hours trading on Friday. After closing down 14 cents, 0.3%, at $ 47.34 per share on above-par volume, Nasdaq-traded shares rebounded to $ 47.91 per share. , up 57%, 1.2%.

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