Vornado Realty Trust (NYSE: VNO), one of the largest real estate investment trusts (REITs), is not likely to give chase to a New York City casino license.
The Hotel Pennsylvania in New York City. Vornado is opting against pursuing a New York casino license. (Image: Untapped New York)
Chairman and CEO Steve Roth commented on that effect earlier today on the REIT’s third-quarter earnings conference call. His remarks arrived about 10 months after reports surfaced that Vornado could be mulling a site near Madison Square Garden and Penn Station as a potential home for a casino hotel.
It’s highly likely that we will not pursue the casino license,” said Roth in response to a question from Evercore ISI analyst Steve Sakwa.
Vornado, already one of the largest commercial real estate owners in the city, could evaluate the site currently occupied by the Hotel Pennsylvania as a potential spot for a casino hotel. That hotel was recently demolished as part of a massive redevelopment plan for the Penn Station area. The REIT will likely focus its efforts on leasing out that space for other commercial purposes.
Vornado First Big Name to Depart New York Casino Race
To date, Vornado is the first of the big names that previously declared an interest in bidding for a New York City-area casino permit to bow out of that competition — one that’s ultra-competitive and shaping up to be costly and time-consuming.
Roth didn’t explain why Vornado is likely throwing in the towel on a New York casino bid, but the current macroeconomic environment isn’t conducive to large, from-the-ground-up commercial real estate projects. High-interest rates have plenty of commercial real estate borrowers and creditors balking at the idea of new projects.
Additionally, Vornado hadn’t declared a partner for the effort, though rumors previously suggested the REIT could team up with billionaire financier Neil Gary Bluhm. Bluhm is a partner in Midwest Gaming & Entertainment. He cofounded Illinois-based Rush Street Gaming, which operates a pair of casinos in the Chicago suburbs, as well as in Philadelphia and Pittsburgh.
Other New York REITs remain engaged in the casino competition. For example, SL Green is working with Caesars Entertainment on a Times Square gaming bid, while Related Cos. is teaming up with Wynn Resorts to bring a casino hotel to another part of Manhattan.
New York Casino Competition Still Long Way from Settled
While Vornado is likely out of the downstate casino competition, the race for the three licenses is far from settled. Some analysts believe that New York regulators won’t decide on the winning bidders until 2025, dousing hopes that such an announcement would arrive in 2024.
Further heightening intrigue in the fourth-largest state is speculation that due to a scandal and federal investigation involving a former executive, MGM Resorts International and Resorts World — operators of two slots-only venues in the New York City area — are no longer shoe-ins to win two of the three licenses.
Recent chatter suggests Las Vegas Sands and Wynn Resorts are among the leading contenders for New York casino permits.
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