Gaming and Leisure Properties to Buy Two Casinos for US$484M

Main Photo: A deluxe room at Le Merigot, the boutique hotel as part of Tropicana Evansville

Date: October 2020

Locations: Dover, Delaware and Evansville, Indiana, USA

Names: Dover Downs Hotel & Casino and Le Merigot and Tropicana Evansville

No. of Keys: 500 and 250

Sellers: Twin River Worldwide Holdings (Dover Downs) and Caesars Entertainment (Tropicana)

Buyer: Gaming and Leisure Properties Inc. has agreed to acquire the real property assets of Dover Downs Hotel & Casino, in Delaware, from Twin River Worldwide Holdings Inc. and to re-acquire the real property assets of Tropicana Evansville, in Indiana, from Caesars Entertainment Inc. after the substitution right related to the property was triggered.

GLPI will acquire Tropicana Evansville’s real property assets for about $340 million, and Twin River will acquire its operating assets for about $140 million.

Separately, GLPI will execute a sale-leaseback directly with Twin River for Dover Downs and will acquire the real property for $144 million.

The two properties have an aggregate real estate purchase price of about $484 million.

Simultaneously with those closings, GLPI will enter into a new triple-net master lease with Twin River for both assets, with an initial term of 15 years and four five-year tenant renewal options. The initial annual cash rent will be $40 million, representing an implied capitalisation rate of 8.3 percent.

In a prepared statement, GLPI Chairman & CEO Peter Carlino noted that the deals diversify GLPI’s portfolio with the addition of a new operator and expand the company’s footprint into Delaware.

The transactions are expected to close in mid-2021, subject to receipt of required regulatory approvals and other customary closing conditions.

Further information on the deal comes from the announcement by Caesars Entertainment, which indicated that it’s selling Tropicana Evansville for $480 million in cash, subject to a customary working capital adjustment.

Pursuant to an exchange agreement with GLPI, Caesars noted, it has agreed to add the real estate associated with Isle Casino Hotel Waterloo and Isle Casino Hotel Bettendorf, both in Iowa, to the GLPI master lease. This reportedly gave Caesars full ownership of Tropicana Evansville and the ability to sell it in whole.

GLPI’s portfolio currently consists of 44 gaming and related facilities, which are geographically diversified across 16 states. It’s tenants include Penn National Gaming, Inc., Casino Queen, Eldorado Resorts, Inc. and Boyd Gaming Corporation. GLP also owns and operates Hollywood Casino Baton Rouge and Hollywood Casino Perryville.

Price: US$484m

Price per Key: $645,333 to include Casino tables

THPT Comment: I guess this deal suggests that gaming has not suffered too badly during the Covid lockdown.

First Seen: Commercial Property Executive

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