Gaming and Leisure Properties Inc. (GLPI), a gaming-focused real-estate investment trust associated with Penn National Gaming and planned to take over the Tropicana Las Vegas, announced on Friday that all of its 48 resort properties are open in some capacity.
Executives have stated that the company’s enhanced partnership with Bally’s Corp. would result in an additional $12 million in annual sales once the transaction is completed next year. GLPI secured the $307m Tropicana Las Vegas deal mid-April, and it is expected to close early next year
The Tropicana will be operated by Bally’s for $150 million. GLPI will keep possession of the land under the resort-casino and lease it back to Bally’s for $10.5 million a year for the first 50 years, with the possibility of an increase.
In addition, Bally’s casino properties in Illinois and Colorado are being acquired by Gaming and Leisure. According to Peter Carlino, Chairman and CEO of GLPI, they will be attached to a previously announced Bally’s master lease for the Tropicana Evansville and Dover Downs Hotel and Casino properties, which is scheduled to be completed by mid-2021.
Strong rent coverage and an accretive cap rate
In a press release Carlino said: “We are delighted to expand and diversify our relationship with Bally’s through transactions that deliver strong rent coverage and an accretive cap rate.
“By adding to the planned master lease with Bally’s, securing rights of first refusal on potential future assets and converting the Tropicana Las Vegas into an income producing ground lease, we expect to drive incremental cash flows while maintaining a strong balance sheet.
“We expect our tenants’ strength, combined with our standing as the sector’s only investment-grade balance sheet, to allow GLPI to consistently grow its cash flows and build value for shareholders in 2021 and beyond.”
On sales of $301.5 million, GLPI posted a first-quarter net income of $127.2 million, or 54 cents per share. In the same quarter a year ago, the company earned $96.9 million, or 45 cents per share, on revenue of $283.5 million.