Big hotel transactions have been few and far between in 2008, but leave it to Las Vegas to think big. On Dec. 15, MGM MIRAGE, through wholly owned subsidiary The Mirage Casino-Hotel, agreed to sell Treasure Island Hotel & Casino to Ruffin Acquisition L.L.C. for $775 million.The hotel, perhaps best known for its live pirate show in front of the property, was acquired for about seven times Treasure Island\u2019s earnings before interest, taxes, depreciation and amortization, said Carlton Geer, executive vice president for CB Richard Ellis Inc.\u2019s global gaming group. The deal has benefits for both sides. The Treasure Island sale, in which MGM MIRAGE will receive $500 million in cash, gives the company an immediate injection of liquidity, which will help it complete CityCenter Las Vegas, its massive mixed-use project on the Strip, Geer said. The cash infusion may be particularly important to MGM MIRAGE if Las Vegas\u2019 economy continues to deteriorate and revenues are threatened at MGM\u2019s properties. \u201cIt really makes their balance sheet stronger,\u201d Geer said.The buyer, Phil Ruffin, who sold the New Frontier Hotel and Casino in Las Vegas for the top-of-market price of $1.2 billion to Elad Properties in May 2007, gains what Geer called a \u201cwell-performing asset\u201d across the Strip from The Venetian.Part of Treasure Island\u2019s value to MGM is its tie-in to other MGM properties on the Strip, giving the company the opportunity to leverage its reservation system and benefit from economies of scale, a positive that Ruffin will not realize, Geer said. On balance, though, he said, the deal was transacted at a \u201cvery fair price.\u201dLas Vegas\u2019 casino hotels are suffering because of the recession, with large casino-hotel operators like Harrah\u2019s and Las Vegas Sands Corp. announcing sizable layoffs. In the long term, however, Geer is optimistic about the city\u2019s future. No other city has the infrastructure, ranging from the number of hotel rooms to the number of taxis, to support tourism as Las Vegas is able to, he said. \u201cIt was after our downturn after Sept. 11, 2001, that we saw a huge wave of hotel development.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Big hotel transactions have been few and far between in 2008, but leave it to Las Vegas to think big. On Dec. 15, MGM MIRAGE, through wholly owned subsidiary The Mirage Casino-Hotel, agreed to sell Treasure Island Hotel & Casino to Ruffin Acquisition L.L.C. for $775 million.The hotel, perhaps best known for its live pirate…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003924694","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n