Gaming and Leisure Properties (GLPI) has secured $307.5m in rent credits for the purchase of Tropicana Las Vegas Casino Hotel Resort real estate properties from Penn National Gaming.
The Non-cash Rent Payment Arrangement is to be extended to current lease agreements in May, June, July, August, October and a portion of November 2020, with more possible short-term sales to come.
PNG, which has opted into an arrangement to see the payment of the annual nominal rent, will continue to run Tropicana for two years or until the company is sold, whichever comes first.
The real estate investment trust, a PNG real estate spin-off, is to perform a sale process in respect of the properties, including the casino and hotel business, in compliance with the terms of the deal.
When a final selling agreement is signed within the first year of the sale period, PNG will receive 75% of the net profit over $307.5 million plus all taxes, expenditures and costs.
When a contract is reached within the second year of the selling period, 50 percent of the proceeds will be provided by the casino operator, according to the terms and conditions of the purchase agreement. Following the initial two years GLPI will receive all proceeds from any sales that occur.
In addition, GLPI has also issued an update to the April 2020 rent list for its real estate portfolio of 44 gaming and related facilities.
Although all the tenants’ properties of the company were closed in mid-March as a result of precautions related to COVID-19, GLPI received 98.6 percent of the April rent, including sums charged by Penn National.
The Chairman and chief executive officer of GLPI, Peter Carlino, commented: “GLPI believes its collaborative and mutually beneficial outcome with Penn National provides us and our investor base greater visibility and predictability for rent receipts over the remainder of 2020.
“We are also grateful to our credit facility lenders for their support in facilitating the transaction with Penn National in a manner that acknowledges the unforeseen circumstances and that represents a unified spirit of cooperation to overcome the challenges presented by COVID-19.”