The "For Sale" sign is now up on the Mirage after last week's announcement by MGM Resorts International that the iconic, 31-year-old property is not a good fit for its plans in Las Vegas.
CEO Bill Hornbuckle said in a Nov. 3 earnings call that the Mirage operations were being sold as part of the company's effort to reduce its "exposure" in the city, adding that the resort was "far down in the spectrum" of priorities for investment. MGM already had an agreement to sell the underlying real estate to Vici Properties.
But while the Mirage may not make sense for MGM, analysts think there are plenty of potential buyers for whom it would make sense.
The property is centrally located along the Strip on a 77-acre parcel. Its location may not have been ideal for MGM, whose other Las Vegas properties -- the Cosmopolitan, Bellagio and Mandalay Bay among them -- are clustered about a mile south of the Mirage on Las Vegas Boulevard, but it is an attractive spot for prospective investors. And as Steve Gallaway, managing partner at Global Market Advisors, put it, the resort has "great bones."
"It's a great asset," he said. "It absolutely needs a face-lift, but the room sizes are good, the suite mix is appropriate, the location of the restaurants is good surrounding the casino floor, it has a great showroom, and [Cirque du Soleil's] 'The Beatles Love' is one of the best shows in Vegas. Its problems are very fixable, and for the right buyer, it makes sense."
A range of prospective buyers
Analysts offered a range of prospective buyers, both established Las Vegas players and regional casino operators seeking to enter the market.
Billionaire Phil Ruffin's Treasure Island connects to the Mirage, but he has previously rejected deals that do not include the land.
Tilman Fertitta, owner of the rapidly expanding Golden Nugget Hotels and Casinos, is another possible buyer, and Penn National Gaming, which missed out in the bidding for the Cosmopolitan, could be interested.
Several Native American tribes that operate casinos, including the San Manuel Band of Mission Indians, which recently purchased the Palms, could also enter the bidding.
C3 Gaming co-founder Andrew Klebanow said the Mirage would be a "near ideal acquisition" for Seminole Gaming's Hard Rock Casinos brand.
CEO Jim Allen "has been aggressively growing the brand throughout the United States, both through acquisitions and newbuilds," Klebanow said. The Mirage, he said, "can easily be transformed into the Hard Rock Casino Las Vegas."
Updates are needed
Whoever does decide to take over operations will have to address something that Global Market Advisors' Gallaway alluded to: The Mirage is in need of an update.
The Steve Wynn-developed property was the world's largest hotel when it opened in 1989, and its Y-shaped tower design, focus on entertainment and other innovations set the standard for future Strip properties.
But today, the rooms and concept feel dated, especially its Polynesian theme and captive wild animals.
"It definitely needs a refresh," said former travel advisor Debra Schroeder, who is founder of the Traveling Well for Less blog and recently stayed at the resort. "It doesn't feel with the times. It's not politically correct, and the new generation of Vegas visitors don't want that. I hope the new owner comes in and really modernizes and revitalizes the property."