Brookfield Asset Management Generated $18 Billion in Revenue in 2013
Brookfield Asset Management won the auction for Revel Casino Hotel. The winning bid by B.A.M. was $110 million. In the end, Brookfield outbid Glenn Straub, a Florida real estate developer who had originally bid $90 million on the Revel Casino.
Once the $110 million bid was received, Straub failed to make a higher bid in the allotted time. Because of his original $90 million, Straub was the stalking horse bidding, so he will receive $3 million breakup fee for the trouble he went to in this process.
Bought at Less than 5% Original Cost
Brookfield Asset Management received a bargain price for its new property. Revel Casino was the most expensive gaming establishment in the history of Atlantic City, with a $2.4 billion price tag.
From the time Revel opened in April 2012, it was beset with high debts and trouble drawing the crowd it needed to offset costs. Revel offered fine dining, striking and innovative architecture, and high dollar entertainment. While these work well for the Las Vegas Strip casinos, Atlantic City attracts more of a bus tour and buffet crowd.
Glenn Straub’s Bids
Glenn Straub, a Florida real estate developer, entered a $95.4 million auction price as his final bid. If Brookfield Asset Management cannot finalize the $110 million sale, then the Straub bid will serve as the backup bid. Straub’s $90 million offer was approved by Revel’s former owners as a benchmark for all bidding.
It is unknown what Brookfield Asset Management hopes to do with its new property. Glenn Straub wanted to use the Revel Casino as a railway link, while building a 35-story tower next door to house a university. Straub said he wanted to improve the city, while drawing geniuses to his college in order to discuss global issues.
Straub Might Challenge Auction
Glenn Straub told Reuters on Monday that he would challenge the auction in court if he did not win the bidding. Throughout the first phase of bidding, Straub and his lawyer complained that the competition was allowed to go behind closed doors to negotiate with Revel Casino’s ownership group, when normally procedures require complete transparency.
Judge Gloria Burns is overseeing the case from the U.S. Bankruptcy Court in Camden, New Jersey. She is expected to approve the final sale on October 7, 2014.
About Brookfield Asset Management
Brookfield Asset Management is a Toronto, Canada-based property management company with $105 billion property portfolio and an $18 billion annual revenue. The company also has a headquarters in New York City, while maintaining a great deal of property in Brazil. In fact, Brookfield Asset Management once was known as “Brascan”, combining the words Brasil and Canada. Brascan began as a Brazilian railway company back in 1899.
Brookfield owns several casino properties. Chief among these is the Hard Rock Casino in Las Vegas. The Atlantis Casino in the Bahamas is the other most notable gaming property owned by the asset management firm, though Brookfield also owns a couple of other such properties. This could prove key to the future of the Revel Casino.
In a later development, it was learned that Brookfield Asset Management plans to reopen the Revel as a casino operation–though with another name. With the $110 million price tag, the owners won’t be weighted down with debt the way the previous owners were. Costs will be less, so the company should be able to make a profit.
The player database could be important, though. Brookfield will be able to draw upon data for its many Las Vegas customers, offering them comps, junkets, and other bargains to try out the Atlantic City property. The Atlantis Casino database is certain to contain many UK-based and Commonwealth players. With these lists of potential gamblers, the new ownership group appears as if it should be able to market to a new clientele and grow the Atlantic City casino economy.
Earlier, people had been concerned the the Revel reopening would simply lead to market cannibalization–Revel would suck customers from other local casinos, but not add new players to their business model. Brookfield should be able to market and get the word out to loyal customers, so a good strategy might be good for the Atlantic City economy, too.
