GLPI completes acquisition of Tropicana Las Vegas, Penn will still operate the resort

GLPI completes acquisition of Tropicana Las Vegas, Penn will still operate the resort

  • Howard Stutz, CDC Gaming Reports
April 20, 2020 7:50 PM
  • Howard Stutz, CDC Gaming Reports
  • Other

Gaming and Leisure Properties completed its purchase of the Tropicana Las Vegas Monday, but Penn National will still operate in the Strip resort when the property reopens once Nevada’s governor mandated casino closures are lifted.

The real estate investment trust, however, said the 1,500-room Rat Pack era casino and its 34-acre site will remain on the market.

As previously announced at the end of March, GLPI is acquiring the Tropicana from Penn for $307.5 million in rent credits that will be applied to the existing leases for May, June, July, August, October, and a portion of November. GLPI owns the land and buildings for more than 30 of Penn’s regional casinos.

The transaction gives Penn some financial breathing room as all 41 of the company’s casinos in 19 states have been closed in an effort to slow the spread of the COVID-19 coronavirus pandemic. Penn had been trying to sell the Tropicana since last year. Penn will continue to operate the property for two years under a lease agreement until the Tropicana is sold. The agreement includes three one-year extensions at GLPI’s option.

The property closed on March 18 and Penn furloughed the Tropicana’s workforce as part company-wide furlough of 26,000 employees on April 1.

In a statement, GLPI said in collected 98.6% of April rent payment covering its 44 gaming properties, including payments from Penn National.

“GLPI believes its collaborative and mutually beneficial outcome with Penn National provides us and our investor base greater visibility and predictability for rent receipts over the remainder of 2020,” GLPI Chairman and CEO Peter Carlino said in a statement.

We are also grateful to our credit facility lenders for their support in facilitating the transaction with Penn National in a manner that acknowledges the unforeseen circumstances and that represents a unified spirit of cooperation to overcome the challenges presented by COVID-19,” Carlino said.

Shares of GLPI closed at $26.33 on the Nasdaq, down 9 cents or 0.34%.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.