Suncoast Hotel and Casino In Nevada Land For Sale For $87 Million, Boyd Gaming Will Continue Managing Gaming Venue

Posted on: October 10, 2019, 10:50h. 

Last updated on: October 10, 2019, 03:15h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

The real estate assets of the Suncoast Hotel and Casino, located at 9090 Alta Dr. in Summerlin, Nevada, are for sale, with a price tag of $87 million.

The Suncoast Casino’s land is for sale for $87 million, but Boyd Gaming will continuing running the gaming operations. (Image: LinkedIn)

Boyd Gaming, the owner of the venue, confirmed the land is for sale, but that the company plans to continue operating the hotel and gaming area. Suncoast opened in September 2000.

Eric Carlton, an agent with the California-based real estate broker Colliers International, said in an interview with KVVU-TV that the land owners are looking to cash out and confirmed the asking price of $87 million.

The Suncoast land is 49.13 acres in the highly coveted master planned community of Summerlin and presents a once in a lifetime generational opportunity,” according to the property listing on Loopnet.

A buyer of the property would gain a fee title and garner at least $60,000 in annual rent.

Gaming Real Estate Is Hot

News that the Suncoast land is for sale extends a recent string of headlines involving owners of gaming-related real estate looking to monetize those assets. Sale-leaseback deals, or SLBs, are expected to continue popping up across the industry, as operators to look to unlock cash from real estate holdings while maintaining day-to-day control of casinos, resorts, and other amenities on the properties.

The transactions are seen as beneficial to both real estate and gaming companies. Owners of gaming real estate typically enter into long-term contracts with casino companies, can steadily increase rent over time, and are not responsible for physical enhancements to the property.

Conversely, the operator reduces assets on its balance sheet, increases its cash on hand, and is able to participate in the upside offered by gaming and hotel revenue.

Prime examples of potential SLBs on the Las Vegas Strip include MGM Resorts’ rumored sales of the Bellagio and MGM Grand, where the company would cash out of the real estate, but continue operating those integrated resorts.

Suncoast Deal Structure

The Suncoast transaction would include at least a 35-year term, structured as a triple-net lease, or NNN.

NNNs can be traced to “industrial real estate, where tenants with different uses required different building services and utilities,” according to Loopnet. “The varied intensity and cost of these different services led landlords to have a hands-off approach and charge just a base rent, or ‘NNN’ rent, thereby allowing the tenants to manage the cost of their space’s services themselves.”

Under this type of transaction, the buyer of the Suncoast property will charge rent to Boyd Gaming, but the landlord won’t be responsible for ancillary costs.

Potentially enhancing the lure of the Suncoast land for buyers is, as News 3 Las Vegas notes, the casino’s status as an oligopoly.

That means the market is protected from increased competition. In addition to Suncoast, Summerlin is home to just two other gaming properties – Red Rock Casino Resort and Rampart Casino.