Atlantic City's Revel Hotel Sells for $110 Million
Atlantic City's Revel hotel closed its doors on September 10, and now, about three weeks later, it has a new owner.
According to multiple sources, Brookfield Asset Management, a Toronto real-estate investment firm, won the bankruptcy auction for the hotel, ponying up $110 million. The offer still must be approved by the bankruptcy court with an initial court date set for October 10.
Brookfield is no stranger to hospitality. It owns the Hard Rock Hotel & Casino in Las Vegas and Atlantis Paradise Island in the Bahamas.
The acquisition didn't come easy. Brookfield was in competition with Florida investor Glenn Straub, who reportedly made a $90-million bid for the hotel earlier this month, with fuzzy plans to alter the property's function.
However, though improbable, Straub and his lawyers are challenging the auction's outcome. As Real Deal writes, the auction was reportedly conducted in secrecy. For example, Revel's lead bankruptcy attorney, John K. Cunningham, did not reveal until Tuesday in a filing designed to disclose potential conflicts of interest that Brookfield, a client of his firm in unrelated matters, was even involved in the auction.
Further, as Philly.com contends, "It's possible that Cunningham and his investment banker colleagues received a timely bid from Brookfield that was deficient or not acceptable to the sellers. The bid procedures approved by the bankruptcy court allowed them to work with Brookfield to improve the bid to the point where Brookfield could participate in the auction.
Even more amazing than the drama surrounding the sale was the actual final purchase price. The cost to build Revel in 2012: $2.4 billion. Cost to acquire Revel two years later: $110 million.