The top executive of the real estate investment trust that holds the land where the Tropicana sits isn’t saying what development plans may be ahead for the site of the 64-year-old, 1,470-room resort on one of the city’s busiest corners.
Peter Carlino, CEO of Pennsylvania-based Gaming and Leisure Properties Inc., told analysts on an earnings conference call Friday that his team is working with executives of Bally’s Corp., which is acquiring the Tropicana for $308 million in a deal announced in April, on long-term plans for the resort on 35 acres at Tropicana Avenue and the Strip.
Bally’s Corp. has affiliations with Major League Baseball, including broadcast rights for several teams, including the Oakland A’s through its partnership with the Sinclair Broadcasting Group. The A’s have been scouting Las Vegas as a potential relocation destination.
Penn National Gaming Inc., of Wyomissing, Pennsylvania, which is affiliated with Gaming and Leisure Properties, is the Tropicana seller 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.
Responding to an analyst’s question, Carlino hinted that more news would come out regarding the Tropicana — 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 has been a little-discussed possible location for a Major League Baseball stadium for the Oakland A’s if the team were to relocate to Las Vegas.
Soo Kim, a hedge fund investor who is chairman of Bally’s board of directors, said in May that he hadn’t heard from Oakland A’s President Dave Kaval but that he’d be happy to talk with him if he came calling. Kaval has not specifically mentioned the Tropicana in interviews with the Review-Journal.
“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 a number of fronts. It’s also fast-growing and dynamic, which is what sports teams like.”
Gaming and Leisure Properties reported record results in the second quarter, which ended June 30.
The company reported net income of $138.2 million, 59 cents a share, on revenue of $317.8 million. In the same quarter a year earlier, GLPI posted net income of $112.3 million, 52 cents a share, on revenue of $262 million.
In May, GLPI’s board of directors agreed to pay a 67-cents-per-share dividend to shareholders of record June 11. The dividend was paid June 25.
Gaming analyst Joe Greff of New York-based J.P. Morgan praised GLPI’s business model in a Friday note to investors.
“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 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 with regard to “re-opening” sectors such as gaming.”
GLPI shares were in a strong climb in after-hours trading Friday. After closing down 14 cents, 0.3 percent, to $47.34 a share in above-average volume, the stock, traded on the Nasdaq exchange, rebounded to $47.91 a share, a 57-cent, 1.2 percent comeback.
Gaming and Leisure Properties Inc.
Second-quarter revenue and earnings for Wyomissing, Pennsylvania-based Gaming and Leisure Properties Inc., a real estate investment trust affiliated with Penn National Gaming Inc., operators of the M Resort and Tropicana in Las Vegas. (Nasdaq: GLPI)
2Q 2021: $317.8 million
2Q 2020: $262 million
2Q 2021: $138.2 million
2Q 2020: $112.3 million
Earnings per share
2Q 2021: $0.59
2Q 2020: $0.52