April 14, 2024
Boyd Gaming Prefers To Maintain Onto Its Las Vegas Actual Property

Posted on: February 11, 2023, 06:07h. 

Final up to date on: February 13, 2023, 01:12h.

Because the dominant identify in downtown Las Vegas and one the most important operators of locals casinos throughout the valley, Boyd Gaming (NYSE: BYD) owns a treasure trove of Sin Metropolis actual property, nevertheless it’s unlikely to promote these properties to boost money.

Boyd real estate
Boyd Gaming’s Aliante On line casino-Lodge in North Las Vegas. The corporate isn’t fascinated about promoting any of its Las Vegas actual property. (Picture: Vegas Means Enterprise)

Boyd CEO Keith Smith not too long ago 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 house market, together with Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Foremost Avenue Station, Sam’s City, Suncoast, and The Orleans.

With the energy of our steadiness sheet, the energy of our money flows and our skill 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 stream place is robust, enabling the operator to pay a dividend and purchase again its personal shares — a uncommon “twofer” within the gaming trade 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

In recent times, transactions often called sale-leasebacks have develop into more and more frequent within the gaming trade. 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 non-public fairness economic system agency for an upfront money cost.

It’s an efficient avenue for elevating money and is basically most popular to issuing new shares or bonds. Nonetheless, the gaming firm continues to be liable for ongoing upkeep of the offered properties and takes on long-term rental obligations to the client in alternate for money.

Boyd at the moment 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 motels in Indiana, Missouri and Ohio. Nonetheless, as Smith advised 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 govt officer additionally acknowledged that the corporate has had talks with VICI Properties (NYSE: VICI) — the most important on line casino landlord. Nonetheless, a deal is “simply not an choice for us.”

Crimson Rock Not Trying to Promote Actual Property, Both

In Las Vegas, Crimson Rock Resorts (NASDAQ: RRR) is Boyd’s most direct competitor within the native demographic and in addition boasts a considerable portfolio of occupied and used actual property.

Nonetheless, like Boyd, the Inexperienced Valley Ranch operator owns the actual property of all of its Sin Metropolis venues and isn’t trying to change that.

“I feel we like proudly owning the actual property. Once more, it doesn’t imply we’re beholden to holding it without end. We’re going to what’s proper to the — what’s in one of the best curiosity of our shareholders over the long run, Cassandra, however preserve wanting again, proudly owning the actual property supplies max — present us most flexibility, together with the flexibility to maintain our workers by COVID,” mentioned CFO Stephen Cootey in response to a query from Jefferies analyst Cassandra Lee on Crimson Rock’s current fourth-quarter earnings convention name.