Casinos' Vegas Bet

Casino owners with aging Las Vegas properties or excess land are wrestling with ways to reap additional value in light of historically high land prices in the city.

With land prices hitting north of $40 million an acre for prime spots on the Las Vegas Strip, sources say casino owners are eyeing joint venture structures that would allow them to monetize individual assets at the higher market prices of land, instead of the lower values the public market is rewarding them.

The joint structure also would also give the owner the added benefit of being able to grab a piece of the future profits of the redeveloped casino.

Traditionally, casino owners with older properties that sit on valuable land had two ways to realize that value: sell the property or develop it.

"Now there is this third option of sharing the development with somebody else by minimizing your capex (capital expenditures), and by monetizing your asset at current land prices," says Wahid Chammas, a senior analyst with Janus Capital Group, a major investor in casino stocks.

The structure is just one way that Las Vegas casino owners are exploring ways to harvest real estate value in what has become a land grab in the city. MGM Mirage(MGM Quote) is at the forefront of such discussions, and the company has stressed in recent months that it was exploring numerous options, including joint ventures, to unlock value.