Gaming and Leisure Buys Las Vegas Casino in Sale Leaseback | GlobeSt
Tuesday 31st March 2020
LAS VEGAS -- Gaming and Leisure Properties is acquiring Penn National Gaming's Tropicana Las Vegas hotel and casino and the land for Penn National's Morgantown, Pa., development in a sale leaseback deal for $337.5 million in rent payments.
The lease for the Morgantown land will generate $3 million of initial annual cash rent for Gaming and Leisure.
As part of the deal, Penn National has agreed to an early renewal for both its master leases with Gaming and Leisure, extending the current terms by five years. Penn National is also granting Gaming and Leisure downside protection for any future competitive impact that Penn National's new Category 4 developments in Pennsylvania may have on its facilities subject to the Penn National master lease. Penn National will otherwise make cash rent payments in April, September, November, and December. Gaming and Leisure has granted Penn National an option to acquire the operations of Hollywood Casino Perryville, in Maryland, subject to the execution of a lease agreement with Penn National.
Tropicana Las Vegas is situated at the corner of Tropicana Boulevard and Las Vegas Boulevard, on the southern end of the Las Vegas Strip. Penn National will continue to operate the Tropicana Las Vegas.
GLPI's Chairman and Chief Executive Officer, Peter Carlino, commented, "This is a win-win agreement that significantly enhances GLPI's certainty from the master leases with Penn National as it assists Penn National in meeting its GLPI rent obligations while helping to create a stronger liquidity roadmap for Penn National.
Given the rapid onset of closures related to COVID-19, these agreements are structured in a manner that allows both companies to achieve their longer term objectives once the virus and its associated impacts abate," says Gaming and Leisure Chairman and CEO Peter Carlino in prepared remarks.
These strategic transactions strengthen the credit support behind Gaming and Leisure's rent payments, allows Gaming and Leisure to control a unique and iconic site on the Las Vegas Strip without carrying costs, offers unique protection to the Penn National master lease from potential competitive pressure, and enhances long term cash flow visibility through the lease renewals, he says.
The parties plan to consummate the transaction by April 30.