Atlantis owner picks up new casino property

Wed, Oct 1st 2014, 09:43 PM

With a new acquisition of an Atlantic City casino hotel, it seems Brookfield U.S. Holdings - which owns Atlantis, Paradise Island, and the company that manages that resort - is doubling down on its casino business.
Brookfield closed a $110 million deal on a casino in Atlantic City on Wednesday, and spokesman Andrew Willis told Guardian Business that the company sees "a number of synergies" between Atlantis and the new property.
"This is our third investment in a major resort. Brookfield currently owns two resort properties with gaming: Atlantis in The Bahamas, acquired in 2012, and the Hard Rock Hotel & Casino in Las Vegas, which we took over in 2011. So we understand the sector," Willis said.
"Revel is a brand new trophy asset on the beachfront, which we are acquiring at a substantial discount to its replacement cost. We are excited about owning the newest and highest quality asset in Atlantic City. This acquisition is consistent with Brookfield's history of contrarian investing on a value basis.
"With Brookfield's ownership of the Hard Rock Casino in Las Vegas and Atlantis in The Bahamas, we have expertise underwriting and operating these types of multi-faceted resorts. We anticipate material synergies between these three high-quality properties."
The New Jersey property is Revel, the fourth Atlantic City casino to close this year. It was the subject of a bankruptcy auction just two years after it began operations. Brookfield's $110 million offer beat out another bidder, and brings the company's casino hotel portfolio total to three: the new property, which Willis called "the newest and highest-quality asset in Atlantic City," a Hard Rock in Las Vegas and Atlantis, Paradise Island.
"We will be using the expertise at Atlantis to help us improve the experience at Revel," he told Guardian Business Wednesday evening.
Brookfield took control of the Paradise Island property - which had been the crown jewel in South African hotelier Sol Kerzner's portfolio - in 2012 as part of a debt swap; according to Willis, the Canadian company has seen "great results" at Atlantis. Management of the property has also gone through changes, with Kerzner no longer managing Atlantis as of September 9. Brookfield Hospitality is now managing the property.
Willis said the company has no specific plans in relation to how Atlantis and Revel would connect, other than that the "great results" the company has had at Atlantis will play a role in how things move forward at Revel.
"It's just too early [to say how]," he said. "I think there will be Atlantis angles."
In July, Brookfield announced that it had completed a $1.9 billion recapitalization aimed at placing Atlantis on secure financial footing. Brookfield Asset Management Managing Partner Andrea Balkan also announced the creation of a new management company, Brookfield Hospitality LLC, to assume management of Atlantis when the management contract with Kerzner International expired.
That contract expired on September 9, 2014.
Just after the refinancing, Atlantis announced a new marketing arrangement with Marriott that saw Atlantis become part of Marriott's rewards and booking programs. As part of that arrangement, Marriott made a $100 million loan to Atlantis.

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