Posted on: December 6, 2022, 02:11h.
Last updated on: December 6, 2022, 02:46h.
Last week, Red Rock Resorts (NASDAQ: RRR) closed on the sale of 21.3 acres of land next to its Durango casino hotel project in Southwest Las Vegas.
The gaming company sold the land to real estate developer Ovation Development Corp. for $23.9 million. It’s expected Ovation will build an apartment complex on the land, potentially providing the new casino with a steady stream of nearby customers.
Red Rock, the parent company of Station casinos, topped off the $750 million Durango project in October. Durango Casino & Resort is slated to open in the fall of 2023. The casino will feature 73,000 square feet of gaming space, a sportsbook, 2,000 gaming machines, and 40 table games.
While Las Vegas is home to the largest concentration of casinos in the US — dozens of which cater to locals — Red Rock believes Durango will be a success because the area in which the venue is being built currently has a dearth of casinos. It’s also one of the fastest-growing parts of the Las Vegas Valley.
Red Rock Previously Planned to Part with Land
Red Rock’s decision to sell the 21.3 acres next to Durango was well-forecast, though the company hasn’t revealed a use for the proceeds.
On an earnings conference call last year, executives from the company said such a transaction would likely occur, and they were fairly accurate in the estimate for proceeds, forecasting $23 million at the time. Red Rock is a frequent buyer and seller of property, and when it’s a seller, it always engages in transactions with companies that aren’t in the gaming industry.
The operator has history with Ovation. Last year, the gaming company sold five acres behind Sunset Station to the property developer. The real estate firm is planning to put senior housing there.
In addition to its namesake venue in Summerlin and the Green Valley Ranch in Henderson, Red Rock operates multiple gaming properties under the Station brand throughout the Las Vegas area. The company also runs 10 Wildfire casinos, including seven in Henderson, according to its website.
Red Rock Major Las Vegas Landowner
Red Rock is one of the largest landowners in Las Vegas and has a massive portfolio of currently unused property.
In July, the operator announced the purchase of 126 acres of land south of the Strip for $172 million — boosting its unused land holdings in the Las Vegas Valley to nearly 430 acres.
In addition to Durango, the operator has other Las Vegas-area projects in the works, including a new Wildfire casino downtown and an overhaul of the currently closed Wild Wild West.
Analysts believe Red Rock could double its Las Vegas footprint by 2030 while driving a 70% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA).
