The new hotel tower at Henderson’s M Resort will open by the end of 2023 and is expected to be completed in 2025, Penn Entertainment Inc executives reported Thursday.
The 384-room expansion will nearly double the property’s capacity to 774 rooms and suites. The $206 million project is part of an $850 million four-property expansion in Illinois, Ohio and Nevada.
Penn CEO Jay Snowden added some details about the projects, including the construction start-up plan, during a third-quarter earnings conference call with investors. Snowden said all four projects would begin by the end of next year, with most spending taking place in 2024 and 2025.
Penn is investing $225 million in the projects with Gaming and Leisure Properties Inc., the Penn-affiliated real estate investment trust that owns the land beneath the four complexes, providing $775 million in funding. Penn negotiated a $350 million floating capitalization rate with GLPI that can be drawn down at Penn’s discretion at then-current rates, giving the company additional balance sheet flexibility. The remaining $225 million via GLPI is at a capital rate of 7.75%.
Penn will launch all four capital projects simultaneously. In addition to the M Resort, other projects include:
— Hollywood Casino Aurora’s $360 million move from an old river barge on the Fox River in downtown Aurora, Illinois, to a new 200-room hotel that will feature 900 slot machines and 50 board games. The new site will also be next to the Chicago Premium Outlets, which attract 8 million visitors a year.
— Hollywood Casino Joliet’s $185 million move from a former river barge on the Des Plaines River near Joliet, Illinois to a new mixed-use development, Rock Run Crossing, less than four miles away . The new facility will have 780 slot machines and 30 table games.
— A new $100 million Hollywood Casino in Columbus, Ohio with a 200-room hotel and a new bar and restaurant.
The new hotel tower at M Resort is expected to take advantage of West Henderson’s growth and will include a 15,000 square foot ballroom that would provide additional capacity for group business.
The M capitalized on its proximity to the Raiders’ headquarters and training center about three miles away. In 2019, the resort became the “Official Raiders Team Headquarters Hotel” and in April 2021, the resort opened the Raiders Tavern & Grill, the world’s only official Raiders-themed restaurant.
The M opened as the southernmost property in the Las Vegas Valley in March 2009. It was acquired by Penn in 2011. Penn recently sold its other Las Vegas property, the Tropicana Las Vegas, to Bally’s Corp.
Analysts applauded Penn’s third-quarter results. The company reported net income of $123.5 million, 72 cents per share, on revenue of $1.63 billion for the quarter ended Sept. 30. For the same period a year ago, the company reported net income of $86.1 million, 52 cents per share, on revenue of $1.51 billion.
In midday midday trading on the Nasdaq stock exchange, Penn shares fell $1.30, 4%, to $31.53 per share.
This is a developing story. Check back for updates.
Contact Richard N. Velotta at firstname.lastname@example.org or 702-477-3893. Follow @RickVelotta on Twitter.