$206M M Resort expansion announced by Penn Entertainment

M Resort, one of Penn Entertainment Inc.’s best performing properties, will see its capacity nearly double after the company builds a second hotel tower at the Henderson property.

The $206 million project is part of a four-property $850 million expansion in Illinois, Ohio and Nevada, Penn announced Monday.

“At the M Resort, the addition of a second tower will benefit from the strong demand in the Henderson local market while providing additional capacity for the group business that is drawn to our market-leading resort and amenities, including our highly successful partnership with the Las Vegas Raiders,” Penn CEO Jay Snowden said in a release.

He said the project would add about 384 rooms bringing its total to 774 rooms and suites at the company’s property south of the Las Vegas Strip. There will be expanded meeting space, updated amenities and additional local partnerships that will be announced at a later date, he said.

No timeline was announced for the project.

Snowden could elaborate on the project Tuesday morning since he’s scheduled to speak at a panel during this week’s Global Gaming Expo conference at The Venetian Expo.

The M opened as the Las Vegas Valley’s southernmost property in March 2009, and was acquired by Penn in 2011. Penn recently sold its other Las Vegas property, Tropicana Las Vegas, to Bally’s Corp.

The M has capitalized on its close proximity to the Raiders’ corporate headquarters and training facility, about three miles away. In 2019, the resort became the “Official Raiders Team Headquarters Hotel,” and in April 2021, it opened the Raiders Tavern & Grill, the world’s only official Raiders-themed restaurant.

Wyomissing, Pennsylvania-based Penn on Monday also announced plans to relocate its riverboat casinos in Aurora and Joliet, Illinois, to new land-based facilities and to build a new hotel at Hollywood Columbus in Ohio.

“Since the change in law to permit land-side casino relocation in Illinois, we have been exploring the viability of relocating our aging riverboats in Aurora and Joliet,” Snowden said in a news release.

“These two projects will significantly improve our offerings in the highly attractive Chicagoland market while creating hundreds of new full-time jobs for the local communities.”

Penn will take advantage of its relationship with affiliated real estate investment trust Gaming & Leisure Properties Inc. to finance the projects. GLPI will provide up to $225 million at a 7.75 percent cap rate for the Aurora project. With the Columbus, Joliet and M Resort projects, Penn may elect to receive up to $350 million of funding in the aggregate from GLPI for real property improvements at then-current market rates, which will incorporate a spread to GLPI’s cost of capital.

A new master lease with GLPI that includes M Resort is scheduled to take effect Jan. 1.

“With respect to the projects, we view both the Nevada and Ohio hotel tower projects as front footed and growth oriented, as both properties have experienced strong demand and are well positioned within their geographies,” Carlo Santarelli, analyst with Deutsche Bank, said in a Monday report to investors.

Brendan Bussmann, founder of Las Vegas-based B Global, said the expansion solidifies Penn’s hold on the south end of the Strip.

“Back in the day, there was supposed to be a resort on every corner of Las Vegas Boulevard and St. Rose (Parkway),” Bussmann said. “There clearly is future demand with a locals market continuing to grow in that part of the valley.”

Penn shares, traded on the Nasdaq exchange, were down $1.23, 4.01 percent, Monday to $29.45 a share in slightly above average volume.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.