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Red Rock Resorts Stakes $172M on 126 Acres of Land South of the Vegas Strip
By Jeff Osienya Jul 23, 2022 IndustryNasdaq-listed Red Rock Resorts has spent a whopping $172 million on a new 126-acre chunk of real estate at the heart of Sin City. The latest real-estate expenditure is part of the company’s wider expansion strategy focused on the local gaming market.Red Rock Resorts has acquired a 126-acre piece of land south of the Las Vegas Strip for $172.4 million. According to property records, the sale of the property, which is located at the southwest corner of Las Vegas Boulevard and Cactus Avenue, was finalized on Monday by developer Larry Canarelli.
Opposite the newly acquired land is another 57-acre piece of real estate owned by Station Casinos, which the company has been trying to sell off for a while. Additionally, just a few days ago, Red Rock Resorts, the parent company of Station Casinos, announced a move to demolish Fiesta Henderson, Fiesta Rancho, and Texas Station casinos and sell the lands. In the announcement, Red Rock disclosed that this move was part of a renewed strategy to ‘double the company’s presence in the Valley’ after a difficult year.
Despite occupying a collective 107.5 acres, the three casinos had remained closed since they were shut down following the outbreak of the Covid pandemic in 2020. As a result of the closures, patrons were forced to move to other establishments, including some owned by the operator. Incidentally, the company CEO had previously reported that the said casinos were the worst–performing even before the pandemic breakout. It was, therefore, only a matter of time before the operator saw it fit to be rid of the properties to avoid further financial overhauls.
Red Rock Resorts also recently sold the Palms Casino Resort to tribal gaming operator San Manuel Gaming and Hospitality Authority (SMGHA) for $650 million. The property had been closed for two years due to the pandemic, and reopened in April as the first ever tribal operated casino in Sin City.
Several Projects to Expand Red Rock Resorts Operations in Las Vegas
As it stands, Red Rock Resorts has amassed a considerable number of land holdings over the years and now has properties scattered in different parts of Sin City. The company website reports about 542 acres of land in Las Vegas and Reno, with the 126 acres not included. Some of its other properties include 45 acres in Inspirada, 47 acres in Skye Canyon, 58 acres in Summerlin, and about 100 acres at Interstate 15, half of which are up for sale.
Another notable property owned by the operator is a 71-acre piece at Durango Drive, 50 of which will be the site of a new resort whose construction began earlier this year. The new resort, which will be called Durango, has a $750 million price tag. The Durango project was commissioned after the company found the area ‘underserved’ and thought the ‘Station Casinos Resort’ would greatly appeal to the Las Vegas locals.
Durango is set to have a 73,000-square-foot casino floor with over 2,000 slots, 46 tables, and a bookmaker. There will also be more than 200 hotel rooms, conference amenities, restaurants, and a pool complex. The site has been in the company’s possession for over 20 years, a period that has been challenging for Red Rock following delays caused by some opposition and the 2007 Recession. However, the project is now slated for completion in 2023.
Another project that recently kicked off in downtown Las Vegas on Fremont Street is the construction of a new Wildfire Casino. Upon completion, the new Wildfire Casino will sit on 5 acres, part of which was formally the site of Castaways. Furthermore, Red Rock recently reported that the much smaller project would have ‘fresh amenities’ catering to local residents. The brand already owns 10 Wildfire Casinos in the area, and Bentar Development is currently handling the ongoing project.
Red Rock has not yet announced what it intends to do with the recently bought land, but there is no doubt that it will be developing something massive, as hinted in a statement released to reporters. The statement read in part:
Quote“We are excited about the potential of this site as a local and regional destination casino resort. The larger acreage parcel allows the company greater flexibility in master planning to take maximum advantage of the future development. We look forward to sharing our plans in the future.”
Betting Big on The Local Sin City Market
Red Rock’s strategy to expand within the Strip and still focus on local residents as its primary clientele sound like a huge risk to some industry observers. However, if you look at how many Californians are migrating to Las Vegas because of the more friendly tax structure, which extends to properties, and cheaper cost of living – it doesn’t seem like such a crazy idea.
The coronavirus pandemic has also shifted how people view their finances, causing an influx in the number of citizens moving to more budget-friendly areas like Las Vegas. As a result, the demand for a local-focused casino industry is now on the rise. With that in mind, the company is placing itself in a position to receive more locals with hardly any compromise on luxury and quality. Moreover, it should also be noted that other big players are also gearing up for the potentially huge market, and talks of billion-dollar projects have already started.
Red Rock Resorts CEO Scott Kreeger recently confirmed that the company is moving strategically and will embark on projects with high economic potential. In June, Station Casinos and Red Rock Resort co-owner Lorenzo Fertitta revealed that the focus was now on the Durango project; after completion, there would be a team regrouping to determine the next move.
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