Las Vegas Market Update-Institutional Transactions Rising fast
Fertitta Brothers Purchased the Palms for $313 million and Invested $620 for renovation
The 17-year-old Resort has completed its phase 1 construction of the largest renovation in Las Vegas history. Total $1 billion has been invested by the Fertittas on this 25 acre site.
The Fertitta family, who sold UFC for $4 billion and has been in the resort/casino industry for over 40 years, sees value of this off-strip site, which is twice as far from the Las Vegas Strip as LVSM.
The Palms has become one of the most popular hotel in Las Vegas since its re-opening. The art museum hotel is drawing tremendous traffic from the strip to the westward, as well as to the Spring Mountain Road area.
UFC Promoter, Casino Giants Making History with Palms
The Palms, which was the home of the 12th season of MTV’s The Real World in 2002, the 2,500-suite hotel and casino is having a $620 million renovation to reinvent its image started at March 2018.
2016年，Station Casinos作价3.13亿美元收购棕榈树酒店，买方拥有者为Frank和Lorenzo Fertitta，亿万富翁、艺术品收藏家和拳击运动推动者。随后6.2亿美元的改建工程包括新增2层4万美元一晚的别墅套间、价值300万美元的苏格兰威士忌收藏、酒店大堂Damien Hirst恶魔雕塑以及其他来自诸如Andy Warhol 和Jean-Michel 等数十名艺术家的收藏品. 该翻新项目最终用目的为打造豪华博彩、娱乐和酒店一站式服务，融合传统拉斯维加斯酒店风格和独特非凡艺术氛围的国际化顶级酒店。
In 2016, the resort was bought by Station Casinos, owned by Frank and Lorenzo Fertitta, billionaire art collectors and fight promoters, for $312.5 million,. The two have since poured money into the resort’s $40,000-a-night two-story villas, a $3 million Scotch whisky inventory, a Damien Hirst shark in the lobby’s bar, and numerous other artworks from the likes of Andy Warhol and Jean-Michel Basquiat. The reimagination is expected to transform Palms into a luxury gaming and entertainment destination by creating a mix of classic Vegas hospitality and extraordinary new experiences through world-class partnerships.
“By the end of the $620 million renovation, Palms will be a completely transformed property making it one of Las Vegas’ most sought-after destinations,” the resort’s general manager, Jon Gray.
The Fertitta Brothers
Fertitta家族自赌场行业起价，Fertitta兄弟的父亲Frank Fertitta在1976年创办Station Casinos，该公司1993年上市，并展开了疯狂的债务驱动扩张。最终公司不堪负债，在Fertitta兄弟的掌控中于2009年破产。7年后，他们在红岩度假村的扶持下再度上市，目前市值27亿美元。
The Fertittas made their first fortune in the casino business. Their father, Frank, launched Station Casinos in 1976. The company went public in 1993 and pursued aggressive, debt-fueled growth. Those liabilities eventually thrust the business, then under the control of Frank Jr. and Lorenzo, into bankruptcy in 2009. Seven years later, they took the repaired operation public again under the banner Red Rock Resorts, which now boasts a market cap of $2.7 billion.
The brothers earned their most lucrative return, however, from their stake in UFC, which they bought for just $2 million in 2001, when the fight promoter teetered on insolvency. Despite significant regulatory hurdles, they grew the business to hundreds of millions of dollars in annual revenues. In August, they sold UFC for $4 billion in a deal led by WME|IMG
Renovation and Operation
Unlike many capital management funds that purchase asset then exit to end-user, the Fertittas are operating the hotel by themselves after almost $1 billion of investment in the property. With such tremendous amount of investment in a Off-Prime Strip hotel, the Fertittas are optimistic about upward momentum of Las Vegas tourism industry, especially in the high-end sector.
Most Expensive Renovation in the City’s History
Land mark Art Collection hotel in Las Vegas
新生的棕榈树酒店有多种值得一去的特色，但其独树一帜的艺术藏品更是将该酒店升级到世界级顶级酒店。该酒店现在已遍布来自Damien Hirst, Jean-Michel Basquiat, Andy Warhol, Adam Parker Smith, Jason Revok, Eric Haze, Scott Hove, Felipe Pantone等许多一线艺术家的典藏级艺术品. 有着诸多艺术氛围的加持，棕榈树酒店得以配备10万美元一晚的Damien Hirst行政套房, KAOS全日制艺术品酒吧，以及号称艺术博物馆的餐厅。
While the Palms is known for many things, one element that truly sets it apart is a world-class art collection that includes pieces by Damien Hirst, Jean-Michel Basquiat, Andy Warhol, Adam Parker Smith, Jason Revok, Eric Haze, Scott Hove, Felipe Pantone, and many more. No corner remains unturned when it comes to art or innovative design. With those, Palms is able to build a $200,000 for two night Damien Hirst Empathy Suite, the KAOS day and nightclub which was built by art pieced, as well as the art collection museum in the dining room.
With the unique art collection in the hotel, customers started to visit Las Vegas specifically for the Palms, the hotel is also getting constant come-back guests, and has become one of the most popular hotel in the city since it’s reopening in early 2019.
With its appeal to both Las Vegas residents and tourists alike, the Palms is a hybrid gaming property that is uniquely positioned to benefit from the strong economic trends in Southern Nevada and record visitation levels in Las Vegas.
Capital Move Away from the Strip
Recently, fewer capital investments are being made within the Prime Strip, due to its land scarcity and overpricing. The investors are focusing on other off-strip area, investment actions are spreading across Las Vegas, Palms, Rio and the future Raider Stadium are typical signals of the movement.
Traffic Drawing by the New Palms
On the other hand, with its uniqueness, the Palms is able to attract tourist from the east of I-15 highway which is the Las Vegas strip to the west which includes our Spring Mountain Road. With other capital investment such as the replacement of Rio in the next 4 years, new development in the Chinatown, the area is becoming an expansion of the Prime Strip.