What a $6.25 Billion Sale in Vegas Says About the Future of Convention Hotels

At least one investment firm doesn’t think the Las Vegas convention business is dead. Las Vegas Sands Corp. announced last week plans to sell its Venetian Resort and neighboring Sands Expo and Convention Center in Sin City to investment firm Apollo Global Management for $6.25 billion. The deal values the real estate of the resort and convention center at $4 billion while the operations cost $2.25 billion. If anyone was expecting to find a bargain on a Las Vegas resort or convention center during the pandemic, the Venetian and Sands Expo sale wasn’t it. By comparison, MGM Resorts International’s sale leaseback deal with Blackstone in early 2020 valued the MGM Grand at $2.5 billion and Mandalay Bay at $2 billion. A similarly structured MGM-Blackstone deal for the Bellagio cost $4.25 billion in 2019. It may be a bit of a head-scratcher that Las Vegas Sands scored the kind of sales figure one would expect during pre-pandemic times instead of nearly a year into a pandemic that zeroed out the city’s cash cow of convention travel. March of 2020 was the last month with any reported convention attendance to the city that was relying on shows like the Consumer Electronics Show to prop up mid-week hotel rates while leisure travel took over during the weekend. The Long View: The commercial real estate industry, particularly sellers, show continued signs of valuing properties at how they feel they will perform on the other side of the pandemic compared to the status quo. Investors, analysts, and executives argue the price discrepancy between sellers and buyers is why there hasn’t been a major uptick to date of hotels transacti