Las Vegas Sands (LVS) will sell its real estate and operations in Las Vegas for an estimated $6.25 billion, allowing the company to reinvest in Asia and pursue high-growth opportunities in emerging markets.
The Venetian Resort Las Vegas and the Sands Expo and Convention Centre are part of the deal, which will see a subsidiary of Apollo Global Management’s funds buy the company’s corporate properties for $2.25 billion.
Significant opportunity to invest
Apollo Partner Alex van Hoek explained: “The Venetian is America’s premier integrated resort, with an unrivalled set of amenities to serve guests across hospitality, meeting events, gaming, and entertainment – categories that we believe are well positioned for strong recovery and long-term growth.
“The team at Las Vegas Sands, under the leadership and vision of Sheldon Adelson, built an irreplaceable asset that is renowned for its quality, scale and integrated offerings, and we see significant opportunity to invest in and accelerate its growth.
“This investment also underscores our conviction in a strong recovery for Las Vegas as vaccines usher in a reopening of leisure and travel in the United States and across the world.”
Investment fund for real estate Vici Properties would then pay $4 billion for the above facilities’ land and real estate assets.
Triple-net leasing deal
The corporation will enter into a triple-net leasing deal for the Venetian Resort with an associate of the Apollo Funds at the same time as the sale closes. The proposed cumulative annual rent will be $250 million, with a 30-year initial period and two ten-year tenant extension options.
Vici Properties’ president and COO, John Payne, commented: “We are absolutely thrilled to enhance our portfolio of market-leading experiential assets with the iconic Venetian Resort complex.
“We have long admired the incomparable size, scale and quality of the Venetian Resort and are proud to opportunistically acquire the asset at an attractive, accretive cap rate for shareholders. Additionally, we are confident Apollo’s vision will greatly benefit the property’s operations for years to come.”
Best fit to build new growth prospects
Both businesses, according to LVS, are the best fit to build new growth prospects and guide the property into the future, as the company seeks to continue its long-standing policy of reinvesting in Asian operations.
Robert Goldstein, Las Vegas Sands chairman and CEO said: “The Venetian changed the face of future casino development and cemented Sheldon Adelson’s legacy as one of the most influential people in the history of the gaming and hospitality industry.
Paying tribute to Sheldon Adelson’s legacy
“As we announce the sale of The Venetian Resort, we pay tribute to Mr. Adelson’s legacy while starting a new chapter in this company’s history.
“This company is focused on growth, and we see meaningful opportunities on a variety of fronts. Asia remains the backbone of this company and our developments in Macao and Singapore are the centre of our attention.
“We will always look for ways to reinvest in our properties and those communities. There are also potential development opportunities domestically, where we believe significant capital investment will provide a substantial benefit to those jurisdictions while also producing very strong returns for the company.”