Gaming and Leisure acquires Hard Rock Rockford real estate for $100 million
Gaming and Leisure Properties (NASDAQ: GLPI ) said Tuesday it will pay $100 million to purchase properties associated with the Hard Rock Casino development in Rockford, Illinois.
Gaming Real Estate Investment Trust (REIT) acquired the property from an affiliate of 815 Entertainment, LLC. GLPI and 815 Entertainment have signed an initial 99-year lease starting at $8 million per year, subject to 2 percent inflation.
In connection with the transaction described above, GLPI will have the right of first refusal on the Rockford Hard Rock Casino building improvements project should a future decision be made to sell upon completion. "
Hard Rock Rockford is one of six new venues approved by Illinois lawmakers in 2019 to shore up the state's struggling finances. It is the first project in the group to begin construction and is currently operating from a temporary site.
Gaming and leisure promotes tenant diversity
One of the key elements in evaluating gaming REITs, namely GLPI and rival VICI Properties (NYSE: VICI ), is geographic and tenant diversification.
Penn Entertainment is GLPI's largest tenant. Other clients include Bally’s, Boyd Gaming, Caesars Entertainment and The Cordish Companies. By purchasing the Rockford casino property, the REIT acquired a financially sound tribal gaming tenant, the Seminole Tribe of Florida, which controls Hard Rock International.
"The Hard Rock brand is world-renowned and will support and solidify the new casino's position as a tourist destination and entertainment venue. Hard Rock is the property manager and equity investor in 815 Entertainment," GLPI CEO Peter Carlino said in a statement. and brought its world-class management team to the project. "
GLPI currently owns real estate assets at 59 venues in 18 states. The Hard Rock will become the sixth Illinois venue in the REIT's portfolio.
GLPI also provides funding
The Hard Rock Casino Rock project is expected to cost US$358 million, and US$120 million has been spent so far. GLPI provides $150 million in financing through a senior secured extended loan. All withdrawals on this line are charged an interest rate of 10%.
"The term loan has a maximum draw term of one year and a maximum remaining term of six years (initial term of five years with one-year extension)," the REIT added.
Hard Rock Casino is scheduled to open in September 2024 and will cover an area of 177,000 square meters, including approximately 60,000 square meters of gaming space. The casino is expected to feature 50 gaming tables, 1,250 slot machines, a sportsbook and an online sports betting companion. Illinois is the second-largest sports betting market in the United States, behind New York.
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Source: www.casino.org
