Bally’s Corporation and Gaming & Leisure Properties, Inc., Monday announced the completion of a previously announced real estate transaction. The Rhode Island-based gaming operator finalized a sale-leaseback transaction price of $150 million payable by GLPI relating to Bally’s Quad Cities in Rock Island, Illinois, and Bally’s Black Hawk in Black Hawk, Colorado.
The properties will be added to Bally’s Master Lease with GLPI with an initial annual fixed rent of $12 million, subject to increases over time based on the Consumer Price Index, with a floor of 1% and a 2% ceiling, subject to the CPI meeting a 0.5% threshold.
GLPI previously stated the properties would be added to a master lease that will include the Bally’s-owned Tropicana Evansville, and Dover Downs in Delaware
The transaction is related to Bally’s offer in April to buy the Tropicana on the Las Vegas Strip for $308 million. It was previously announced that Bally’s will pay $150 million to Penn National Gaming for the Strip resort’s nonland assets and will lease the land under the hotel-casino. GLPI will continue to own the land and collect $10.5 million in initial annual rent under a 50-year lease.
During GLPI’s 2020 fourth-quarter conference call in May 2021, CEO and Chairman Peter Carlino emphasized the importance of the relationship between the Pennsylvania-based real estate investment trust and Bally’s.
“That probably was a driving part of this,” Carlino said during the conference call with analysts and journalists. “There was a lot of interest in the range of … what we had invested. Maybe you could have made a couple of dollars. But I think we took the long view here to create an earning asset; after all, that’s the business we’re in.”
The deal for the Tropicana is expected to close in early 2022.
