Real Estate Investment Trust (REIT) MGM Growth Properties is interested in acquiring the Venetian or other large Las Vegas Strip property, provided it finds the right partner to manage such property.
The company’s chief executive, James Stewart, shed some light on its plans in Las Vegas during a conference call with investors on Monday.
Mr. Stewart said they would definitely be interested in adding the Venetian or another Strip casino complex to your portfolio and that if the right opportunity presented itself, this is “absolutely a deal we would make.”
Mr. Stewart’s comments came less than a week after news emerged that the Casino giant Las Vegas Sands is in initial talks to ditch its Vegas wallet, which includes the Venetian, the Palazzo and the Sands Convention and Exhibition Center. The company is believed to be seeking $ 6 billion for the properties.
MGM Growth Properties and other large casino-focused REITs are considered potential bidders for the Sands Strip assets.
Following a three-month closure of its casinos due to the Covid-19 pandemic, Las Vegas has now been fighting for return to pre-pandemic levels as the worst health crisis the world has experienced in many years has paralyzed its tourism and convention business.
But while many might believe that Sands’ decision to abandon the local market is a repudiation of the city, Mr. Stewart said seeking $ 6 billion for the company’s properties on the Strip should be seen as a validation of the potential of Las Vegas. In addition, he explained that Sands may simply want to invest their money in growing their businesses in Macau and Singapore.
Other REITs also potentially interested
MGM Growth Properties may not be the only large casino REIT interested in the Sands portfolio in Las Vegas or other major acquisitions on the Strip.
VICI Properties executives said last week that they were too interested in adding a great Las Vegas casino to your asset portfolio.
VICI President John Payne said during a call to investors that they remain “excited about this market for the long term” and that Las Vegas has to “get over not having business meetings right now and some international business, but We think that will come back. “
On the other hand, Gaming & Leisure Entertainment Inc., the third of the big three casino-focused REITs, said they’re not really interested in buying a big asset in Las Vegas.
The company’s first vice president of investment, Matt Demchyk, said last week that when you look at the Strip and “the fixed costs associated with property and travel and convention exposure, right now if we write assets there it is even more difficult, with the same economy to reach them to pass. “
Gaming & Leisure Entertainment spun off from Penn National Gaming in 2013, MGM Growth Properties spun off MGM Resorts International in 2015, and VICI Properties spun off from Caesars Entertainment Corp. in 2017.
All three casino operators transferred ownership of their properties to their spin-offs in an attempt to get some tax advantages and other benefits and to focus primarily on the growth of property operations. REITs pass on their earnings to their investors without paying corporate income taxes.