Tropicana Las Vegas Listed for $384 Million, Post-Repair Value Could Be $500 Million

Posted on: February 11, 2021, 01:18h.

Last updated on: February 11, 2021, 02:10h.

About a month after Tropicana was listed for sale again, owner Gaming & Leisure Properties (NASDAQ:GLPI) finally has an official asking price: $384 million, according to real estate web site

Tropicana Las Vegas
Tropicana Las Vegas
Tropicana Las Vegas. It’s for sale for $384 million, but it may be worth more. (Image: AP News)

Rumors about the fate of the venue have circulated since March 2020. That’s when GLPI acquired the property and the ground lease of an asset in Morgantown, Pa. from Penn National Gaming (NASDAQ:PENN) in exchange for $337.5 million in rent credits. Today, GLPI owns Tropicana’s land, while Penn maintains operational obligations.

Both the real estate and operating rights are for sale. But the aforementioned $384 million price tag references the physical asset. That asking price is well below Tropicana’s estimated worth, at least in the eyes of some.

Should a buyer make needed enhancements and refurbishments, the famous gaming property could sport an after-repair value (ARV) of $500 million, according to That means a buyer could walk right into $116 million in equity.

Trop value
Trop value
Tropicana Las Vegas could be worth more than its asking price. (Image:

Discounted Price Tag Explained

It’s reasonable to ponder why the Tropicana isn’t being spruced up prior to the sale to fetch a higher price. But the strategy is easy to comprehend for investors familiar with GLPI’s way of doing business.

The real estate investment trust (REIT) owns a sprawling portfolio of gaming real estate across 15 states. But its preference is for regional casinos, not destination markets such as Las Vegas. In fact, Tropicana isn’t listed on GLPI’s property roster on its web site.

Assuming Tropicana Las Vegas sells, the REIT’s Nevada exposure will consist of M Resort, Spa & Casino in Henderson, Tropicana in Laughlin, and Cactus Pete’s Casino Resort in Jackpot.

Penn, GLPI’s largest tenant, operates M Resort and Cactus Pete’s. But reducing its Sin City footprint makes sense as well because, at its core, the company is a regional gaming firm. It’s the largest in the US.

Expect Plenty of Suitors

GLPI hasn’t identified potential buyers for Tropicana. But last year executives from the company said there was plenty of interest, though much of that boiled down to tire-kicking, not actual dealmaking.

With rumors swirling that Caesars Entertainment (NASDAQ:CZR) could soon put Planet Hollywood on the block, there could be competition among sellers looking to unload Strip assets. There’s also likely to be a receptive audience for both venues. The coronavirus pandemic depressed gaming real estate prices, meaning it’s a buyer’s market.

The Strip casino real estate rumor mill usually kicks up private equity companies, tribal gaming entities, and operators currently lacking exposure to the US gaming mecca. To that last point, Bally’s Corp. (NYSE:BALY) is a name to remember for several reasons.

First, the Rhode Island-based company has a deeply acquisitive history. Second, it has no Las Vegas footprint. Finally, it has a relationship with GLPI, as it leases Dover Downs Hotel and Casino in Delaware and Tropicana Evansville in Indiana from the REIT.

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