The Tropicana was the first place I ever stayed in Las Vegas. It was a decent place with a cozy casino floor, though my lasting memory of it was that somehow I hurt my leg when I was visiting, so the walk to the hotel tower after a long day of being a good tourist was agonizing. Also, the poker room was tiny. This is all just a stupid way of introing an article about the Tropicana Las Vegas being on the market.

Listing broker Michael Parks, part of CBRE Group’s global gaming group, said on Monday that Gaming and Leisure Properties (GLPI) is looking to sell the south Strip property. It is open to different types of deals – it could sell it completely or sell it and then rent it back.

Right now, it appears that Parks and Gaming and Leisure are taking a wait-and-see approach, just letting it be known that the Tropicana is available.

“We’re just waiting to see how things shake out in the world,” Parks told the Las Vegas Review-Journal.

GLPI just acquired the Tropicana from Penn National Gaming in April, during the COVID-19 shutdown. GLPI is actually a real estate investment trust, spun off from Penn National Gaming, so the sale effectively kept the casino in the family. When they agreed to the transaction in March, the deal was worth $337.5 million, but it closed at $307.5 million.

Penn National, in turn, is leasing the Tropicana from GLPI so that it can continue to operate the property. The sale price was also not in cash, but rather rent credits for Penn National to pay the lease for May, June, July, August, October, and part of November 2020.

Penn National is operating the Tropicana for two years, with three one-year extension options available. If, though, GLPI sells the property within the first year, Penn National gets 75 percent of the proceeds above $307.5 million. If the Trop is sold in the second year, Penn National gets 50 percent. After that, everything goes to GLPI.

Because of that clause in the sale agreement, most assumed that GLPI intended to try to sell the property. Penn National obviously knew, as well, which may be why it agreed to the rent credits. It gets to make money without paying rent (pandemic closure not withstanding – the Trop still hasn’t opened and won’t until September 1) and then possibly make a few extra bucks if GLPI flips the property.

Parks believes that GLPI can get at least $360 million for the Tropicana, which is what Penn National paid for it five years ago.

Macquarie Group casino analyst Chad Beynon thinks so, too. He told the Review-Journal that there has been “speculation” that the Tropicana is worth from $400 million to $700 million.

“Anytime it feels like we’re at the bottom and it’s the end of the world, that’s generally when buyers come out and at least have conversations with the holders of some of these assets,” Beynon said.

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