Vornado Realty’s NYC Casino Bid Appears to Be Canceled

Posted on: October 31, 2023, 05:11h. 

Last updated on: October 31, 2023, 05:11h.

Vornado Realty Trust (NYSE: VNO), one of the largest real estate investment trusts (REITs), is not expected to pursue a New York City casino license, according to Chairman and CEO Steve Roth. This decision comes after months of speculation about a potential casino hotel near Madison Square Garden and Penn Station. Instead, Vornado will focus on leasing out the space for other purposes.

The Hotel Pennsylvania in New York City. Vornado is opting against pursuing a New York casino license. (Image: Untapped New York)

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’s decision makes it the first major player to withdraw from the competitive race for a New York City-area casino permit. The current macroeconomic environment, with high interest rates and the challenges of large-scale real estate projects, likely played a role in this decision. However, other REITs such as SL Green and Related Cos., in partnership with Caesars Entertainment and Wynn Resorts respectively, are still engaged in the competition.

Roth did not provide specific details on Vornado’s decision, but the unfavorable economic conditions may be a significant factor. The borrowing and lending rates in commercial real estate have deterred many from pursuing new projects.

Another reason for Vornado’s withdrawal is their lack of a partner for the casino project, despite previous rumors of a collaboration with Neil Gary Bluhm, a billionaire financier in the gaming industry. Bluhm is known for his involvement with Midwest Gaming & Entertainment and Rush Street Gaming.

The competition for the three New York casino licenses is far from settled, and analysts predict that regulators may not announce the winners until 2025, delaying any potential decisions until then. Las Vegas Sands and Wynn Resorts are emerging as top contenders for these coveted permits.

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