Las Vegas Strip-Based Tropicana Property Sold to Penn National Gaming for $307.5 Million
LAS VEGAS, NV – According to recent reports, the Las Vegas Strip-based property that the Tropicana Hotel and Casino currently occupies has been purchased by Gaming & Leisure Properties Inc., formed in November 2013 as a corporate spin-off from Penn National Gaming. The company owns 44 casino properties, and operates two of them.
As a result of the ongoing coronavirus pandemic sweeping the nation, Penn has been facing money problems brought on by resort closures; currently, they have 41 properties that are closed due to governmental stay-at-home mandates and business shutdown orders, which is causing serious financial issues for the company. Currently, Penn has approximately $730 million of cash and equivalents, according to reports.
In order to preserve their liquidity, Penn sold the land occupied by the Tropicana to Gaming & Leisure Properties Inc. for $337.5 million in rent credits, finalizing the sale on April 23. The rent credits will be applied to existing leases beginning in May.
Going forward, Penn will continue to run the day-to-day operations of the Tropicana for the next two years, or until the resort and land are sold. If Penn sells within the first year, they will receive 75 percent of the net proceeds above $307.5 million; if the sale occurred during the second year, they will receive 50 percent of the net proceeds above the same amount, $307.5 million.
Going forward during the pandemic, Penn will be reducing their daily operating costs, lowering compensation to its executives and board of directors, and has furloughed its 26,000 nationwide employees. Penn shares began a sharp decline at the end of February falling from $38.28 to today’s $17.87, as of press time, 3:45 PM.
“We believe that these collective steps will allow us to successfully weather the state-mandated closures related to the COVID-19 crisis,” said Penn CEO Jay Snowden.
The Tropicana Las Vegas is a franchise of Hilton’s DoubleTree chain. It offers 1,467 rooms, a 50,000 square foot gaming floor, and 72,000 square feet of convention and exhibit space.
Editors note: The particular photo of the Tropicana Las Vegas featured in this article requires editorial credit to Kobby Dagan, Shutterstock.com, licensed.
Shelter Realty is a Real Estate and Property Management Company specializing in the areas of Henderson, Las Vegas and North Las Vegas, NV. Feel free to give us a call at 702.376.7379 so we can answer any questions you may have.