Goldman bets on Nevada casino portfolio

Whitehall Street Real Estate Funds, the property investment arm of investment bank Goldman Sachs, is acquiring a four-casino portfolio from Carl Icahn’s American Real Estate Partners for $1.3bn.

Goldman SachsWhitehall Street property funds have acquired four casinos from American Real Estate Properties, part of Carl Icahn’s American Real Estate Partners, for $1.3 billion (€954 million). American Real Estate says it will post a $1-billion gain on the transaction.

The portfolio includes the Stratosphere Casino Hotel & Tower, Arizona Charlie’s Decatur and Arizona Charlie’s Boulder, all in Las Vegas, and the Aquarius Casino Resort, which is located in Laughlin, Nevada.

American Real Estate started building the portfolio in 1998 with the Stratosphere, which is located on the Strip in Las Vegas and caters to out-of-town visitors. In 2004, the firm invested in the Arizona Charlie properties and acquired the Aquarius in 2006, all of which cater to local gamblers.

The acquisition includes 17 acres of undeveloped land near the Stratosphere, which also sports a 1,149-foot tower. According to a statement released by the seller, the portfolio includes 4,912 hotel rooms, 4,887 slot machines and 122 table games spread over 236,000 square feet of casino space.

The deal is subject of the approval of the Nevada Gaming Commission and Nevada State Gaming Control Board.

Much like its lodging-industry cousin, the gambling sector has been drawing the attention of a number of private equity real estate investors. 

Last month, California private equity real estate group Stockbridge Real Estate Funds worked with Los Angeles hospitality, nightclub and real estate developer SBE Entertainment to acquire the Sahara Hotel and Casino on the Las Vegas Strip for an undisclosed price.

Other recent acquisitions include the recent acquisitions of Harrah’s by Texas Pacific Group and Apollo Management, the takeover of Station Casinos by Colony Capital and the purchase of the Hard Rock Hotel and Casino in Las Vegas by DLJ Merchant Banking.