About ten months ago, Penn National Gaming decided to sell the physical land under the Tropicana Las Vegas to real estate investment trust (REIT) Gaming and Leisure Properties (GLPI) while it continued to operate the casino and the rest of the amenities at the Las Vegas Strip property. Now, Penn is prepared to walk away completely and is accepting offers from potential buyers who want to purchase the property and the operating rights. While the casino operator is reducing its Vegas presence, another is still trying to get in, but Virgin Hotels Las Vegas is finding it difficult to get going amid a global coronavirus pandemic. 

The link between Penn and GLPI is solid, given that the REIT was part of the casino operator’s operations until 2013. It now holds a lot of the real estate Penn operates, and the plan to unload the Tropicana may have been in the works from the time GLPI took possession of the real estate last year. The new sale was confirmed by Michael Parks, the VP of CBRE Capital Advisors, but adds that there is no official sales price. 

Two years ago, the property may have been able to go for around $700 million, double what Penn received when it sold the real estate to GLPI, but the COVID-19 situation has caused a lot of movement in real estate values. Still, the Tropicana has outperformed expectations and could command a higher price than other venues that are being put up for sale. 

As Penn is potentially considering a smaller Vegas footprint, Virgin is anxiously awaiting the opportunity to enter the market. The site of the former Hard Rock Las Vegas has been completely converted to carry the Virgin logo and design, but sticking to a schedule as COVID-19 continues to pummel Las Vegas is proving difficult. The grand opening of the new property has been delayed once again.