Posted on: February 11, 2023, 06:07h.
Final up to date on: February 11, 2023, 06:07h.
Because the dominant title in downtown Las Vegas and one the biggest operators of locals casinos throughout the valley, Boyd Gaming (NYSE: BYD) owns a treasure trove of Sin Metropolis actual property, but it surely’s unlikely to promote these properties to lift money.
Boyd CEO Keith Smith just lately mentioned as a lot in an interview with Howard Stutz of the Nevada Impartial. The Las Vegas-based firm runs 10 gaming venues in its residence market, together with Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Primary Avenue Station, Sam’s City, Suncoast, and The Orleans.
With the energy of our stability sheet, the energy of our money flows and our potential to entry different types of financing, we simply don’t have a necessity (to promote actual property),” mentioned Smith in an interview with the Impartial following the corporate’s fourth-quarter earnings report.
Certainly, Boyd’s money circulate place is powerful, enabling the operator to pay a dividend and purchase again its personal shares — a uncommon “twofer” within the gaming business nowadays. On the finish of 2022, the agency had $283.5 million in money available and $3.05 billion in debt.
Boyd Not Eyeing Sale-Leaseback Offers
Lately, transactions referred to as sale-leasebacks have turn into more and more widespread within the gaming business. In these offers, a on line casino operator sells the property property of a venue or a number of venues to an actual property funding belief (REIT) or a personal fairness financial system agency for an upfront money fee.
It’s an efficient avenue for elevating money and largely most popular to issuing new shares or bonds. Nonetheless, the gaming firm remains to be answerable for ongoing upkeep of the offered properties and takes on long-term rental obligations to the customer in change for money.
Boyd presently has a relationship with Gaming and Leisure Properties (NASDAQ: GLPI) as a result of that gaming REIT owns the property property of 4 Boyd on line casino accommodations in Indiana, Missouri and Ohio. Nonetheless, as Smith informed the Impartial, that association was in place with a previous tenant when Boyd acquired the working rights to these venues in 2018.
The Boyd chief government officer additionally acknowledged that the corporate has had talks with VICI Properties (NYSE: VICI) — the biggest on line casino landlord — however a deal is “simply not an choice for us.”
Purple Rock Not Trying to Promote Actual Property, Both
In Las Vegas, Purple Rock Resorts (NASDAQ: RRR) is Boyd’s most direct competitor within the locals demographic and likewise boasts a considerable portfolio of occupied and used actual property.
Nonetheless, like Boyd, the Inexperienced Valley Ranch operator owns the true property of all of its Sin Metropolis venues and isn’t seeking to change that.
“I feel we like proudly owning the true property. Once more, it doesn’t imply we’re beholden to holding it eternally. We’re going to what’s proper to the — what’s in the perfect curiosity of our shareholders over the long run, Cassandra, however hold wanting again, proudly owning the true property gives max — present us most flexibility, together with the flexibility to maintain our workers by means of COVID,” mentioned CFO Stephen Cootey in a response to a query from Jefferies analyst Cassandra Lee on Purple Rock’s current fourth-quarter earnings convention name.
