Operator News
US – Gaming and Leisure falls slightly following portfolio reshuffle
By Phil - 28 February 2022
North American casino operator Gaming and Leisure Properties, owned by the Zacks REIT and Equity Trust generated revenues of $298.34m for the quarter ended December 2021, compared to $300.16m.
A transformational 2021 saw the company sell Hollywood Casino Baton Rouge, buy the real property assets of Maryland Live!, Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh, and buy the real estate assets of Bally’s casino properties in Rock Island, Illinois and Black Hawk, Colorado.
Peter Carlino, Chairman and Chief Executive Officer of GLPI, commented: “The fourth quarter of 2021 was an active and productive period for GLPI marked by strong operating results and increased dividends as we continue to leverage our deep knowledge of the gaming sector to drive long-term growth while actively managing our tenant relationships, financing activities and capital structure.
“During the fourth quarter, we added a new marquee tenant to our roster of the nation’s leading regional gaming operators through the completion of new lease and partnership agreements with The Cordish Companies (“Cordish”), a preeminent developer of large-scale experiential real estate projects, casinos, hospitality and entertainment districts. The new leases have strong rent coverage at an accretive cap rate and grow our rental cash flows while further expanding and diversifying our tenant base. Furthermore, our agreement with Cordish aligns both companies for potential future casino development and financing partnerships in other areas of their portfolio of real estate and operating businesses. We closed the acquisition of the real property assets of Live! Casino & Hotel Maryland (“Maryland Live!”) in a creative manner, by assuming approximately $363 million in debt (which has since been repaid) and issuing approximately $200 million of operating partnership units. The remaining consideration was a mix of cash on hand, proceeds of our December 3.250% senior unsecured notes offering and our recent common stock offering which also partially prefunds the acquisition of the real property assets of Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh, for which we entered into definitive agreements during the fourth quarter.
“During the quarter, we also completed the sale of the operations of Hollywood Casino Baton Rouge to Casino Queen and entered into an amended and restated master lease with Casino Queen, which added the Baton Rouge facility to their existing lease for the DraftKings at Casino Queen property in East St. Louis. As with our Cordish and Bally’s Corporation (“Bally’s”) arrangement, we have structured a longer-term opportunity with Casino Queen as we now have the right of first refusal for other sale leaseback transactions for up to an incremental $50 million of rent over the next 2 years.
“In the second half of this year, we expect to complete the acquisition of the real estate assets of Bally’s Corporation’s casino properties in Rock Island, Illinois and Black Hawk, Colorado subsequent to which we will add these properties to the existing Bally’s master lease. We have positioned GLPI for future growth opportunities with Bally’s by securing the right of first refusal to fund real property acquisition or development project costs associated with all potential future transactions in Michigan, Maryland, Virginia and New York through one or more sale-leaseback or similar transactions for a term of seven years.
“Looking forward, we believe GLPI is well positioned to deliver long-term growth based on our relationships with the nation’s most esteemed regional gaming operators, our rights and options to participate in select tenants’ future growth and expansion initiatives, and our ability to structure and fund transactions at attractive rates. Taken together, these factors support our confidence that the Company is well positioned to extend its long-term record of shareholder value creation.”
GLPI’s primary business consists of acquiring, financing, and owning real estate property to be leased to gaming operators in triple-net lease arrangements. As of December 31, 2021, GLPI’s portfolio consisted of interests in 51 gaming and related facilities, including approximately 35 acres of real estate at Tropicana Las Vegas, the real property associated with 34 gaming and related facilities operated by Penn (excluding the Tropicana Las Vegas), the real property associated with 7 gaming and related facilities operated by Caesars Entertainment, Inc. (“Caesars”), the real property associated with 4 gaming and related facilities operated by Boyd Gaming Corporation (NYSE: BYD), the real property associated with 2 gaming and related facilities operated by Bally’s, the real property associated with gaming and related facilities at Live! Casino & Hotel Maryland operated by Cordish and the real property associated with 2 gaming and related facilities operated by Casino Queen. These facilities are geographically diversified across 17 states and contain approximately 27.6 million square feet of improvements.
