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, nevertheless it’s unlikely to promote these properties to boost money.
Boyd CEO Keith Smith not too long ago stated as a lot in an interview with Howard Stutz of the Nevada Impartial. The Las Vegas-based firm runs 10 gaming venues in its dwelling market, together with Aliante, California, Cannery, Fremont, Gold Coast, Jokers Wild, Important Avenue Station, Sam’s City, Suncoast, and The Orleans.
With the power of our steadiness sheet, the power of our money flows and our potential to entry different types of financing, we simply don’t have a necessity (to promote actual property),” stated 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 lately. 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 grow to be more and more widespread within the gaming trade. In these offers, a on line casino operator sells the property belongings 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. Nevertheless, the gaming firm continues to be liable for ongoing upkeep of the bought properties and takes on long-term rental obligations to the customer in trade 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 belongings of 4 Boyd on line casino accommodations in Indiana, Missouri and Ohio. Nevertheless, as Smith instructed 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.”
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 locals demographic and in addition boasts a considerable portfolio of occupied and used actual property.
Nevertheless, 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 believe we like proudly owning the actual property. Once more, it doesn’t imply we’re beholden to holding it endlessly. 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 hold trying again, proudly owning the actual property gives max — present us most flexibility, together with the power to maintain our workers via COVID,” stated CFO Stephen Cootey in a response to a query from Jefferies analyst Cassandra Lee on Crimson Rock’s latest fourth-quarter earnings convention name.
