Years After Exiting Its Adaptive Reuse Big Box Real Estate, Allegiant Air Is Now Selling The Florida Resort It Developed

After investing >$700 MM to develop a resort and repurpose former Big Box retail buildings as family entertainment centers, Allegiant Air is divesting its real estate to focus on the airline business

Allegiant Air ALGT 0.00%↑ appears set to exit the real estate development business.

This time for good.

After spending over 6 years—and more than $700 MM—to develop the Sunseeker Resort in Port Charlotte, FL, the airline is now under contract to sell the 785-room property to Blackstone Real Estate for $200 MM.

Sunseeker was the first new-build resort to open in Southwest Florida in more than decade and features an 18 hole golf course, over 20 restaurants and bars and more than 60,000 square feet of meeting space.

It is located just ten minutes away from Punta Gorda Airport where Allegiant offers flights to over 50 destinations.

Allegiant had envisioned that Sunseeker would be a key attraction to lure customers onboard its aircraft and sell them vacation packages.

But it was developed by Allegiant at significant cost in time, capital and opportunity cost.

Beginning in 2017 Allegiant spent approximately $35 MM to acquire 20 land parcels from 15 different owners to entitle the 22 acre Sunseeker site.

It also acquired a nearby golf course and country club.

Construction started in 2019 but was halted for 17 months during COVID.

After restarting in 2021 there were further delays—and $35 MM in damage—due to the effects from Hurricane Ian and a fire at the site.

The lengthy delays, as well as inflation and supply chain issues, increased the project cost by over $200 MM over Allegiant’s original ~$500 MM budget.

Sunseeker finally opened in December 2023.

But the resort lost more than $25 MM during its full year of operation in 2024 and incurred another ~$5.7 MM in damage from two more hurricanes.

While Allegiant executives noted that the resort generated a slight amount of cash in Q1 2025, they were clear that it was time to move on from the underperforming resort.

When the sale to Blackstone closes later this year Allegiant will be out of the real estate development business.

However while Sunseeker was Allegiant's highest profile real estate development, it was not the airline's only foray into real estate projects.

Back in 2018 Allegiant executives were pitched a unique opportunity:

Retailers like Sports Authority, Toys R Us and Kmart had recently gone bankrupt and vacated millions of square feet of Big Box retail space throughout the country.

And this vacant former retail real estate was likely to be available at bargain basement prices—including near many of the airports that Allegiant served.

It also just so happened that the vision of Allegiant's executive team at the time was to operate as a complete leisure travel company that offered a variety of products and services that went well beyond an airline flight.

And so went the pitch to the Allegiant executives:

Why not lease these empty Big Box retail buildings at bargain basement prices and convert them into family entertainment centers (FECs) that offered arcade games and other indoor amusement activities as a means to expand the Allegiant brand, attract new customers and earn a few bucks for the airline?

The Allegiant executive team believed that FECs would help the Company build its brand and attract new customers in places where it was not very well known.

The FECs were also expected to generate ancillary income for the company, encourage customers to more closely associate the airline with "fun" activities and move Allegiant one step closer to its goal of being a leisure travel company.

So in early 2018 Allegiant leased a vacant 100,000 square foot home décor showroom in Utah at a low rent of approximately $5 per square foot.

The site was located in Clearfield, UT, a mere 10 miles from Ogden-Hinckley Airport where Allegiant had been operating flights for several years.

After several months of renovations Allegiant opened a family entertainment center (FEC) named Allegiant Nonstop in the former home décor showroom.

Allegiant had added an array of arcade-like games and features such as multi-level laser tag, bowling, go-karts, mini-golf, bounce areas, video games and a food service area.

The result was a venue similar to a Dave & Buster's site—but about three times the size!

Allegiant was eager to rollout additional FECs and saw an opportunity to build "a number of these centers in and around our colder climate origination cities thereby providing us another touch point with our customers."

So in 2019 Allegiant leased a 100,000 square foot former Value City Furniture store in the Detroit suburb of Warren, MI and, after a significant renovation, opened its second FEC.

Interestingly, Allegiant did not even serve Detroit Metro Airport at the time it opened the Warren FEC; the closest nearby airport that Allegiant served was Flint Bishop International Airport over 60 miles away.

Later in 2019 Allegiant also entered into a lease for a second 100,000 square foot FEC in Utah—this time in the Salt Lake City suburb of West Jordan which was roughly 30 miles from Provo Airport where Allegiant operated flights.

But Allegiant was not content with simply being a tenant.

The airline also acquired a pair of vacant Big Box retail buildings to repurpose them as FECs with its own development team and using its own capital.

Allegiant spent $6.5 MM to acquire a 66,000 square foot former Marsh Supermarket in Fort Wayne, IN and a 60,000 square foot vacant Gander Outdoors store in Chesterfield, MO with plans to convert both buildings into FECs.

In March 2020—at the onset of the COVID pandemic—Allegiant closed its two operating FECs and suspended all non-essential capital spending.

It discontinued all work on its in-progress West Jordan FEC and recognized an $18.3 million non-cash impairment charge in connection with the FEC closures.

Allegiant also shelved its real estate development plans for the two Big Box buildings that it had purchased in Indiana and Missouri.

It later sold the former Marsh Supermarket building in Indiana at a ~50% loss and took a ~$500,000 hit when it sold the former Gander Outdoors building in Missouri to a car dealership chain in 2022.

Allegiant ultimately exited the FEC business entirely.

Although the Clearfield, UT building was vacated (and has since been turned into a furniture store), the Warren, MI site was sold to another FEC operator who re-opened it under the slightly different Universal Nonstop moniker.

So why did an airline spend years—and millions of dollars of shareholder capital—to develop a Florida resort and acquire Big Box real estate for adaptive reuse as FECs?

Maybe Allegiant wanted to build its brand and attract new customers to the airline?

Perhaps it anticipated to earn strong returns in resort operations and the FEC business?

Or maybe (gasp) it just wanted to be a real estate developer???

Whatever the case it is unlikely that Allegiant’s current leadership would pursue other non-core real estate acquisitions or new ground up development projects.

After all the airline business is tough enough!