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Monday, April 27, 2009 | 8:16 a.m.
Las Vegas Sands Corp. is considering a sale-leaseback deal for one of its Macau casino properties, the South China Morning Post reported today.
The gaming operator plans to put the Sands Macao up for sale for about $1.3 billion after failing to sell its luxury shopping centers in Macau, the newspaper said.
The report said Las Vegas Sands was considering selling the building and continuing to run the casino while paying the new landlord rent based on performance.
The Post said talks for a sale-leaseback were launched when there were no takers for its shopping centers attached to the Venetian and Four Seasons resorts in Macau for the $1 billion asking price.
"It was kind of, 'OK then, if you don't want the malls, do you want the Sands?'" an unnamed source was quoted as saying. The newspaper said the source confirmed the company's gaming license was not for sale.
The Post reported analysts were skeptical of a sale-leaseback of the Sands because of the weak recent performance of the Macau gaming market -- the world's largest -- due to the recession, travel restrictions on visits from mainland China and rising competition in the gambling market near Hong Kong.
Sands officials declined comment, the Post reported.
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Although the current financial troubles of many banks are in part attributable to their real estate-related transgressions, they are looking to their corporate real estate holdings to help bail them out.
HSBC is considering sale and leaseback deals for its headquarters buildings in New York, London, and Paris. The sales are expected to raise more than $4 billion.
Also, Credit Suisse is considering a similar deal involving two London office buildings for about $600 million.
The logic behind these moves is simple: Sale-leaseback deals generate cash. Then, the operating leases are little more than a footnote on the balance sheet.
While the value of commercial real estate worldwide has fallen in the last 12 months and financing can be hard to find, sale and lease back deals are a great strategy!
Sounds like they are getting desperate.
Turn the casinos into timeshares, I own it this week you own it that week and so on.