Gaming & Leisure Properties Inc. announced that it has closed on the purchase of the real-estate assets of two Cordish Gaming casinos. Live! Casino & Hotel Philadelphia and Live! Casino & Hotel Pittsburgh changed hands for $674 million.
The buy was funded with $423 million in debt, which GLPI says it has repaid already, and $137 million in operating partnership units — three million in total — plus an undisclosed amount of cash.
Cordish, for its part, entered into a master lease with GLPI and will continue to operate the casinos under a 39-year pact (which can be extended until 2082). The lease will cost Cordish $50 million a year.
In a prepared statement, GLPI CEO Peter Carlino said, “The Cordish Companies is world renowned for creating large-scale experiential real estate projects, casinos, hospitality and entertainment districts and we believe their Live! brand exemplifies their track record of development and operating success. Further, our PA Live! Master Lease with Cordish has strong rent coverage and is part of an accretive overall transaction that positions Gaming and Leisure Properties to continue to build value for shareholders through our industry-leading, high quality tenant roster.”
In other contexts, Carlino has indicated that Cordish and GLPI may team up on further Live! joint ventures, even in non-gaming jurisdictions.
He concluded, “We are excited to welcome the Live! Pennsylvania properties to the GLPI family and we look forward to working with their team to support the long-term success of the properties. In addition, our announced transactions with Bally’s Corporation for properties located in Rock Island, Illinois and Black Hawk, Colorado are now expected to close in the first half of 2022, while the transactions for Tropicana Las Vegas are expected to close by year end.”
The latter’s operations are being purchased by Bally’s Corp. and Carlino has expressed openness to Bally’s Chairman Soo Kim’s desire to demolish the venerable property and possibly replace it with a new resort or a baseball stadium.
(Reported CDC’s Buck Wargo: “GLPI, the nation’s first REIT focused on assets leased to gaming operators, has 50 gaming assets in 17 states. Its tenants include Penn National Gaming, Caesars Entertainment, Boyd Gaming, Casino Queen, and Bally’s.”)
With the closing of the Cordish deal, GLPI gains a downtown Philadelphia casino (albeit one that has not lived up to Cordish’s projections) with 2,100 slots, 116 live table games, 15 electronic table games, and 29 poker tables. It is also host to a FanDuel-branded sports book and a 208-room hotel. Live! Pittsburgh is a satellite casino and thus has no hotel, just 750 slots and roughly 30 table games. Its sports book is also allied with FanDuel.
The Pennsylvania transaction concludes a three-casino deal that GLPI struck with Cordish late last year. Already closed is the purchase of the real estate of highly lucrative Live! Maryland. At the time that pact was announced, Global Market Advisors partner Brendan Sussman said, “It’s a continued shift in the casino model and for Cordish, a change in direction from a family-run business to the asset-light model that other major companies have embraced thoroughly.”
Added JP Morgan analysts, “We also like that GPLI is adding a new and reputable real estate/gaming partner that potentially could lead to future accretive transactions.” Indeed, GLPI has right of first refusal on any sale-leaseback (or similar) transaction that Cordish pursues under the Live! imprimatur.
