...the sale by one of his subsidiary companies, American Real Estate Partners. The portfolio was sold to Whitehall Street Real Estate Funds, an affiliate of Goldman Sachs.
The golden nugget of the deal is 17 undeveloped acres on the Stratosphere property on a piece of the Las Vegas Strip that expected to boom during the next 10 years. MGM has been assembling a large size parcel nearby and Boyd Gaming is busily developing a $4.5 resort dubbed Echelon Place in the same vicinity. Prime land on the strip is selling for an average of $17 million an acre, making the 17 undeveloped acres worth $289 million on its own. The other hotels in the deal include two off-Strip Arizona Charlie's casinos and the Aquarius Casino Resort, which is adjacent to the Colorado River in Laughlin.
"We believe that this sale represents an opportunity for American Real Estate Partners to take advantage of the current favorable market environment for gaming assets and to realize significant gains on our multiyear investment in the industry," Icahn, chairman and general partner of American Real Estate Partners, said in a statement.
A fifth property, the Sands in Atlantic City and some adjacent property, was sold in November for $274.8 million to Pinnacle Entertainment. Those 16 acres will be redeveloped into a yet to be announced mega-resort, which is expected to cost more than $1 billion to develop and construct. The Sands closed last year and was the smallest and weakest performing casino in Atlantic City.
"Carl [Icahn] is an astute purchaser of assets," said American Casino & Entertainment Properties President and Chief Operating Officer Richard Brown. "He tends to go in and purchase undervalued assets. When you take a look now at what the multiples are now in gaming, Carl [Icahn] felt now was the time to sell."
The Stratosphere Las Vegas Hotel & Casino is a decidedly mid-market property featuring a 100,000 square foot casino. The highlight of the 2,444 room property is the Stratosphere Tower, the tallest tower in the United States (more than 100 stories). Atop the tower are the world’s highest thrill rides including Big Shot, X-Scream and Insanity: which dangles people over the edge of the tower.
Arizona Charlie's Boulder features 302 hotel rooms and a small 35,000-square foot casino while Arizona Charlie's Decatur has 258 rooms and a 56,706-square foot casino. The Aquarius, which was formerly known as the Flamingo Laughlin, has 1,900 rooms and is a leader in the Laughlin market.
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