Stations Buys The Palms

LVA is reporting that Stations are purchasing the Palms. Can the Rio be far behind? It's shaping up to be a real battle between them and Boyd for supremacy off the strip.

 

CET wants to much for Rio. They are never going to get what they want but if they lower the price enough, they can get a bidding war started. I wonder what Stations cash reserves were before the IPO. Buying Rio on top of Palms seems ambitious because the IPO generated a decent but unsexy cash haul for them.

 

Palms sell out to station would be interesting

 

Boyd Sandwich........Gold Coast could buid a " pedestrian freeway" that would be pointed right in to the casino on GC property from the Palms directly to the Rio and capture all the Station members casino hopping if that happened. I would think the GC would be more heavily traveled if the Rio and Palms shared a comp system unlike it is now and that could be their obvious route.

Then it turns in to a comp/ room rate battle between Boyd and Station over there. Fun to day dream......

I know every time I have stayed at either I have done the shortcut through the GC garage and out the other side of the GC and drop a twenty in a VP and grab a beer on the way at least one way.......nice and shady during the day but maybe a little dodgy looking late at night for some. The garage could be it up light and painted and put in ads and colored lights and it would be a lot more appealing on the Rio side. I like all three hotels now....we play in all three as often lately have been norm for one of the three to stay in.

Hmmmmm....... I will miss the Palms being an independent...........kinda' running out of those. Definitely have enjoyed my stays and playing there. Wonder if the condo tower would be part of the sale, I would asume so ?

 

If Stations does purchase the Palms, then i will no longer boycott the Palms and make the Rio, Gold Coast, and "Stations" my menage et trois off Strip. I can then take the Rio Shuttle and walk to Gold Coast and "Stations".

• May 9, 2016 13:19 Station to Buy Palms: It has not been officially announced, but Las Vegas Advisor has it on extremely good authority that the Palms, which was recently placed on the market, is being bought by Station Casinos in a move that would make sense. The company previously purchased the original Fiesta (now Fiesta Rancho) from Palms founder George Maloof, which also adds a certain pleasing symmetry to the transaction. Stay tuned for updates!

 

For this to work, Stations is going to need to be friendlier to out of towners, especially since they have to book lux suites and Palms Place.

 

I've always liked staying at the Rio but it's clear CET hasn't been putting much/any money into the place for awhile. Swapping out restaurants is fine but the place needs work. Given CET's financial state I would think they could use the cash. Once they lower their price it would make sense for Station or Boyd to buy it. Maybe CET is waiting until the whole bankruptcy thing is over.

 

It's official:

http://vegasinc.com/business/2016/may/10/station-casinos-to-buy-the-palms-for-3125-million/

CET wanted 1.something Billion for Rio. That's why it hasn't sold. When you look at other transactions and deals, it's clear that's pie in the sky. Palms is going for 31.25M. The two Cannery casinos sold for $230M. Aliente sold for $380M. If you want to argue Rio is worth more than the locals casinos, consider that Ruffin claimed to offer $1.3B for Mirage, which would make Rio worth less than what CET is asking for it. The Palms sale probably really hurts the valuation of Rio. I think CET needs to get more realistic about things. I don't know if it benefits them to stick to their price. I don't think they want it anymore and the market comps aren't helping their case.

 

http://www.ktnv.com/news/palms-casino-resort-sold-for-3125-million

I believe the number is 312.5 Million. Rio numbers were discussed at 500 million valuation around 6 years ago. Now that CET is moving towards the REIT model, they maybe content to hang on to it, but I am not sure how much cash the Rio is generating these days. Here's a link to the old article discussing the 2010 bids for Rio Las Vegas. http://www.reviewjournal.com/business/harrahs-mum-about-rumors-rio-sale

 

Palms for $312.5M? Damn. But Penn Gaming bought Tropicana for $360M, so I guess that isn't terrible. But Penn buying Harrah's STL for $610M in 2012 was sorta dumb...lol They have slipped from 2nd to 3rd/13 best in the state since as well.

 

312.5 million based on the size and scope of the Palms, with the Ivory Tower, Fantasy Tower and Palms Place as well as several upscale restaurants is quite fair. Boyd just paid 230 million for 2 small Cannery properties that are constructed like warehouses, and everyone praised that purchase. The Palms is a legit, sizable and quality resort property.

Nick

 

Not questioning the price now necessarily, but I'm a bit shocked how much casinos have been devalued in the last few years. I always thought Penn overpaid for Hollywood STL, and I think this proves it. Unless Palms grosses less than $10M a month I guess (Hollywood STL grosses about $18M a month)

 

Yeah, just goes to show you how much fortunes can change in 10 years. In 2006 the Palms and Maloofs were flying high with the new tower, playboy club, nightlife, and dining.
Now the place is just viewed as a nice locals place IMHO. Given that the Palms Place is a condo residence I am not so sure it was fully part of this deal. I am sure the operating company still
has some condo units that it rents on behalf of investor / owners but not sure how many units are owned by the casino operating unit.

 

Looking at the price now, yeah, Harrahs STL does seem overpriced. I really didn't think about it either way at the time. In the period after the sale, it was clear part of the draw there was the CET/TR network. I wonder what the value of land is there as there is a lot of undeveloped property as part of the complex. There is a opportunity to expand or to sell it for development to recoup some of that money.

 

I've always enjoyed the Palms and stop in there at least once each trip. The crowds have definitely dwindled in recent years. It will be interesting to see what, if any, changes Station makes. I don't think it really needs many changes. Palms Place can be a great value. From a marketing standpoint Station can do better than Palms did. I get an occasional Palms email and that's it. You can't log in to look at your points or see offers or anything like that. Once it's fully integrated with Station you will be able to do that.

 

Has any casino deal in Las Vegas since Wynn fleeced MGM in 2000 made money for the builder/owner worthy of the investment? It seems like the casino struggles, they get sold for a huge discount so the new owner is in it for less so now it's profitable.

 

I used to party there back then. Good times. Maybe one day it can be restored to its former glory...

 

I've been a Stations fan for quite some time. Always take either Palace, Red Rock or Sante Fe up on an offer at least once a year. Last october, 2 cousins of mine joined us in Vegas for our Anniversary celebration week (10/7-11) and they stayed at Palms. Said that they enjoyed the rooms /pool. WE did Paris and put some friends up at Gold Coast, Tuscany Suites and Stratosphere with room comps. Sure hope that the Palms is incorporated into the Station offers by October 1st of this year. They, the Palms, already have decent VP and the Sunday brunch at the Bistro is great (IMHO)!

The value of sale I will leave for others to discuss, however I am glad that SCLV is getting closer to Paris/Ballys!

 

I have a strong feeling that off-strip properties will make a resurgence. I know this board has been saying it for a while, but the Strip is beginning to become unreasonably priced. I logged out of my TR and checked prices and am baffled. Who'd pay $190/night on the weekend to stay at an Indigo Tower room at Bally's? Personally, for the quality of the rooms, pH and Paris are way too pricey ($220+ / weekend night). Same applies to mLife properties. I'm amazed that it's cheaper to stay full price at VP than the cheapest room at Caesar's. Palms presents a great value prop, they just need to reinvigorate it. The nightclub there used to be amazing, yielding enormous crowds.

 

I think CET should hang on to Rio and make it an off Strip budget hotel like Boyd and Stations. I go to Rio just to walk over to Gold Coast for the buffet. Have Rio with a buffet with prices more in line with GC not Paris or Caesars. I stayed at Rio a couple of years ago (comped), i loved Rio, the beach, the big rooms, and just a few minute ride to/from the Strip.
Increase the Tram times from Bally's and Harrah's to Rio. Lower the gambler odds on table games to get people to play off Strip similar to Downtown. By doing this, the Rio stays a Caesars property, so Total Rewards will still have relevance off Strip, can then compete with Boyd's/Stations.
CET has many clubs on the Strip geared to young people. Have Rio geared towards the older crowd with shows, buffet, discounts, Slots/VP, etc.

If CET still treats Rio like an expensive hotel/casino which is no longer working, then they should sell. But if they treat Rio like and alternative buddy to the higher end resorts, maintaining the great Pools and oversized rooms, but with budget friendly gambling odds, budget dining eateries and shows, etc., then the older crowd who are Total Rewards members will gamble, dine, and stay at Rio and keep the money not going to Boyd/Station's and keeping it in Caesars family.