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Gaming and Leisure Properties (GLPI) has expanded its portfolio with the acquisition of three casino resorts in South Dakota and Nevada for a total of $105m.
The acquired properties are the Silverado Franklin Hotel & Gaming Complex in South Dakota, Deadwood Mountain Grand in South Dakota and Baldini’s Casino in Nevada.
Concurrently, GLPI has established a new tenant relationship with Strategic Gaming Management, entering into long-term lease agreements.
Under the terms of the agreements, GLPI will lease the properties to affiliates of Strategic Gaming Management for an initial 25-year term with two ten-year renewal periods.
The total investment, including capital improvement proceeds, amounts to $110m.
The leases will generate an initial aggregate annual cash rent of $9.2m, representing an 8.4% capitalisation rate.
Additionally, GLPI has secured a right of first refusal on future acquisitions related to Strategic Gaming Management until the latter’s adjusted earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs (EBITDAR) reach $40m annually.
Peter Carlino, GLPI CEO and Chairman, commented: “With our acquisition of the Silverado, DMG and Baldini’s properties, we are pleased to further diversify our property portfolio while expanding our tenant roster through our new relationship with Strategic, a dynamic and growing gaming operator.
“The addition of Strategic’s properties expands our portfolio to 65 properties across 20 states with 9 tenants and is expected to be immediately accretive to GLPI’s operating results.”
J. Grant Lincoln, Strategics’ CEO, added: “We are pleased to begin our partnership with GLPI. Our operating approach, informed by decades of successful experience in competitive gaming markets, is laser-focused on bottom-line results.
“Our platform is well positioned for thoughtful, ongoing growth. As we explored the options for a sale-leaseback partner, GLPI rose above the rest given their unique approach and true emphasis on partnership as well as their deep experience as gaming operators.”
