Which strip properties are paid off completely?

Just a passing thought as I get in the mindset to visit LV again. I'll be out there for business for a few weeks at a time over the next few months so I've been thinking about my hotel options.

In particular, I wonder if the high end properties like Venetian, Palazzo, and Bellagio are anywhere near being paid off. I would guess that some like Bill's, Casino Royale, and possibly even MGM Grand have been paid off for a while and the owners lucked out on location as a reason to not have to implode and come up with something new and hot.

I imagine it will be decades before CityCenter as a whole is paid off to where a comfortable profit can be made.

Quote: desertair

Just a passing thought as I get in the mindset to visit LV again. I'll be out there for business for a few weeks at a time over the next few months so I've been thinking about my hotel options.

In particular, I wonder if the high end properties like Venetian, Palazzo, and Bellagio are anywhere near being paid off. I would guess that some like Bill's, Casino Royale, and possibly even MGM Grand have been paid off for a while and the owners lucked out on location as a reason to not have to implode and come up with something new and hot.

I imagine it will be decades before CityCenter as a whole is paid off to where a comfortable profit can be made.

Not sure how you are defining "paid off." Large corporations rarely get a mortgage like you do for your house. After that, most of the large gaming companies have lots of bonds (Harrah's/Caesars this means you!) to pay for whatever. As a major corporation your goal is *not* to pay off all of yoru debt, but rather to keep your debt at a servicable level and maintain an active and liquid market for your bonds and commercial paper.

Yep, corp debt is deductible and the investment has a nice depreciation schedule, it gets paid down but rarely paid off. Why not gamble with the marker your bank or bondholders provide?

But what about the non-mega corporation properties? At it's peak in 2007, strip properties were changing hands for $30+ million dollars per acre. Is there anyone on the Strip without a note?

Quote: Ayecarumba

But what about the non-mega corporation properties? At it's peak in 2007, strip properties were changing hands for $30+ million dollars per acre. Is there anyone on the Strip without a note?

Treasure Island has almost no debt. For those of you who don't remember, Phil Ruffin made his fortune in convenience stores and farm equipment. He bought his first casino in Bahamas in 1995, and two years later bought the New Frontier in 1998. He sold right at the peak of the market (early 2007) for over $1 billion more than he paid for the property. The new owners, ELAD, demolished the old property but abandoned all development plans in wake of the recession.

Extremely cash rich, the 72 year old man married a 24 year old beauty queen from the Ukraine. He then purchased Treasure Island from MGM for $600 million in cash and $175 million in secured notes, which was less than the $1 billion cash horde he had earned only the year before.

In an interview he told the LVRJ that he had enough cash to operate the Treasure Island without debt. Hence he could make a profit. Like the New Frontier he thought he would make big money in the long run. He also was able to provide his young bride with an opportunity to run the spa, instead of watching him trade municipal funds back in Kansas.

Quote: Scotty71

Yep, corp debt is deductible and the investment has a nice depreciation schedule, it gets paid down but rarely paid off. Why not gamble with the marker your bank or bondholders provide?

Generally this statement is very accurate. Most businesses regard "dead equity" as poor business. While some properties like the "El Cortez" probably had no debt once the other downtown properties were sold, they are an exception. Of course, when the recession hit, you made out if you had a little dead equity.

Quote: pacomartin

In an interview he told the LVRJ that he had enough cash to operate the Treasure Island without debt. Hence he could make a profit. Like the New Frontier he thought he would make big money in the long run. He also was able to provide his young bride with an opportunity to run the spa, instead of watching him trade municipal funds back in Kansas.

Or watching him mess around with other ladies back in Kansas... then again, I'm assuming she was a mail-order bride so what does she care?

It also explains why TI's advertising campaigns really appeal to Midwestern customers. They really try to make it sound like it's the all-in-one stop you need for the Vegas experience, when it's lacking a great nightclub, a good location (it's a bit far North on the strip and the "competition" is all the SUPER high end resorts), and it's wacky theme (or nowadays, lack thereof).

Quote: Tiltpoul

Or watching him mess around with other ladies back in Kansas... then again, I'm assuming she was a mail-order bride so what does she care?

Wow, a beauty queen bride a half century his junior and a young son, and you think he is messing around?

Interview with Phil Ruffin where he explains how he hate debt.

Quote: pacomartin

Wow, a beauty queen bride a half century his junior and a young son, and you think he is messing around?

And there are beauty queens from America, China, India... look, maybe the guy is faithful, and maybe she knows the arrangement, but let's face it.... guys in power often cheat. There are some noble ones out there, but a lot of them do still fool around.

Look at Arnold Schwarzenegger. Yes Maria Shriver is older, but obviously he though he could get some on the side. That never seemed like a marriage of convenience, I think they were probably in love at one point... and he still found a maid to get it on with him. It doesn't matter how beautiful or successful or young your wife is. Guys like to explore.

Quote: Tiltpoul

Look at Arnold Schwarzenegger. Yes Maria Shriver is older, but obviously he though he could get some on the side. That never seemed like a marriage of convenience, I think they were probably in love at one point... and he still found a maid to get it on with him.

Men like Arnold get hit on by good looking women
everywhere they go. Its very hard to resist, something
none of us here will ever have to worry about.