🚦The Hard Corner

Presented by Marhilus Ventures 

 

Happy Thursday!

We're your go-to source for the latest news in the retail and finance sector of commercial real estate. Every other week, we'll provide you with a concise and insightful roundup of the key stories shaping our markets.

This edition highlights the latest market shifts, including a rise in the 10-year Treasury yield to 4.05%, and the dramatic implosion of the Tropicana in Las Vegas, paving the way for a new stadium. We also explore key trends in commercial real estate, from growing debt to evolving retail dynamics, offering insights on developments that could impact investment strategies.

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📉 Market Spotlight

S&P 500

Current: 5,785.39

2 Weeks Ago: 5,722.26

10 Year Treasury

Current: 4.05%

2 Weeks Ago: 3.79%

1 Month SOFR

Current: 5.02%

2 Weeks Ago: 5.25%

WSJ Prime Rate

Current: 8.00%

2 Weeks Ago: 8.00%

*Data from 10/09/2024

 đź“° Featured News

Tropicana Implosion Signals Next Wave of Las Vegas Development

In a city known for its high-stakes transformations, the iconic Tropicana hotel-casino was reduced to rubble in a dramatic implosion early Wednesday morning, making way for a new era of Las Vegas development. This latest demolition will clear the way for a $1.5 billion stadium, which will become the new home for Major League Baseball’s former Oakland Athletics, now preparing for their next chapter in Sin City.

The Tropicana, opened in 1957, was one of the last remaining Rat Pack-era properties. Its fall marks the end of a series of vintage hotel-casino demolitions that have transformed the Strip over the past 30 years. The 23-story structure was brought down with 2,000 pounds of explosives in a carefully choreographed implosion at 2:30 a.m., to the amazement of thousands of onlookers watching from nearby hotel rooms and millions more online.

Bally’s Chairman Soo Kim reflected on the historical significance of the Tropicana, calling it a "pioneer of the Strip" that helped shape the city’s entertainment legacy. Its replacement—a ballpark-anchored, mixed-use complex featuring retail and a hotel-casino—represents the future of Las Vegas, as the city embraces new entertainment possibilities.

Tropicana Las Vegas when it opened in 1957. (Las Vegas Convention and Visitors Authority)

Shifting from the Past to the Future

The Tropicana’s implosion is just the latest in a long line of iconic Las Vegas hotels to meet the wrecking ball. In recent decades, the gambling capital has seen the dismantling of Rat Pack-era properties, including the Sands, Stardust, and Desert Inn, making room for modern mega-resorts. Analysts note that while the Tropicana’s fall might be one of the last major demolitions, Las Vegas’ thirst for development remains strong.

Michael Petrivelli, director of market analytics for CoStar Group, pointed out that the likelihood of seeing as many demolitions in the next 20 years is low, but not impossible. “Never say never in Las Vegas,” he remarked, referencing the city’s ever-changing landscape.

As Las Vegas continues to reimagine itself, demand for hotels remains high. Last year, Harry Reid International Airport saw a record 57.6 million passengers, and that number is expected to rise to 65 million in the coming years. With such growth, the city is expanding its capacity to accommodate visitors, including plans for a supplemental airport 30 miles south of the city.

However, with the recent closures of both the Tropicana and the Mirage (now being transformed into a Hard Rock Hotel), the city has lost 4,600 hotel rooms, the largest reduction in the Strip’s inventory in over a decade. Analysts believe it will take years for Las Vegas to rebuild its hotel supply to previous levels. For now, new hotel construction is mainly focused on limited-service properties in areas beyond the Strip, including Henderson and the airport vicinity.

The Tropicana, a fixture on the Las Vegas Strip since 1957, was the latest of several vintage hotel-casinos imploded over the past 30 years (CoStar)

Sports and Entertainment Drive Future Growth

The Tropicana’s implosion is just one part of a larger trend reshaping the Vegas Strip. In recent years, the city has increasingly leaned into sports and entertainment, with the arrival of the NFL’s Raiders, the NHL’s Golden Knights, and an annual Formula One race. The Sphere, a new high-tech arena resembling an eyeball, has become a must-see attraction.

Developers are already eyeing future projects, including potential venues for NBA and Major League Soccer teams. Las Vegas has positioned itself as a prime candidate for league expansions, continuing to diversify its offerings beyond gambling.

What Remains

Despite the rapid changes, some Las Vegas icons, like the Flamingo, which opened in 1946, remain standing. Instead of being razed, these historical venues are being renovated. Caesars Entertainment, the Flamingo’s owner, recently announced an overhaul of the property, set to include new dining and entertainment options.

As Las Vegas looks to the future, the city’s skyline will continue to evolve, with more mixed-use developments and entertainment venues expected to spring up along the Strip. Yet, for many, the implosion of the Tropicana marks the end of an era—one that helped transform Las Vegas into the world’s entertainment capital.

 đźš¦ The Hard Corner Picks

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đź›’ The Retail Corridor

Editor’s Note

We dedicate significant effort into crafting a newsletter that balances information with engagement, but let's be honest – newsletters aren’t our day job. Marhilus Ventures is a diversified investment firm, involved in real estate, finance, and business investments. Our niche? Retail assets, hence "The Hard Corner." Specializing in middle-market value-add properties, both single and multi-tenant, we strategically invest capital through direct equity, joint venture equity, and debt structures across the United States.

Go Check out our investment criteria, if you have anything that may be of interest, shoot it over. We appreciate it!