Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) (“GLPI”)
announced today that it has acquired the land associated with the
Hard Rock Casino development project in Rockford, IL from an
affiliate of 815 Entertainment, LLC (together, “815 Entertainment")
for $100.0 million. Simultaneous with the land acquisition,
GLPI entered into a ground lease with 815 Entertainment for a
99-year term. The initial annual rent for the ground lease is $8.0
million, subject to fixed 2.0% annual escalation beginning with the
lease’s first anniversary and for the entirety of its term.
In addition to the ground lease, GLPI has also
committed to providing up to $150.0 million of development funding
via a senior secured delayed draw term loan, subject to regulatory
review. Any borrowings under the senior secured delayed draw term
loan will be subject to an interest rate of 10.0%. The term loan
has a draw period of up to 1-year and a maximum outstanding period
of up to 6 years (5-year initial term with a 1-year extension). The
term loan is prepayable without penalty following the opening of
the Hard Rock Casino in Rockford, IL, which is expected in
September 2024. The term loan advances will be subject to typical
construction lending terms and conditions.
In conjunction with the foregoing transactions,
GLPI will receive a right of first refusal on the building
improvements of the Hard Rock Casino in Rockford, IL if there is a
future decision to sell them once completed.
Primely located just off Interstate 90 in
Rockford, IL, The Hard Rock Casino in Rockford, IL will consist of
approximately 177,000 sq. ft. featuring an approximate 60,000 sq.
ft. gaming floor, initially with 1,250 slot machines, 50 table
games, and in-person and online sportsbooks in the U.S.’s second
largest sports wagering market. The project is currently under
construction, with a total projected budget of approximately $358
million, inclusive of the temporary facility, with approximately
$120 million spent to date.
Peter Carlino, GLPI’s Chairman and CEO,
commented, “Our agreements with 815 Entertainment will allow GLPI
to expand its footprint with the addition of a new ground lease, a
new tenant, and a commitment to provide potential funding. We
believe this is an attractive ground lease transaction for our
shareholders as the strong initial results at 815 Entertainment’s
temporary facility demonstrate the strength of the location and the
depth of the market. The Hard Rock brand is world renown and will
support and solidify the new casino’s position as a tourist
destination and entertainment venue. Hard Rock is the property
manager and an equity investor in 815 Entertainment, bringing its
world-class management team to the project. The overall transaction
structure makes $250 million available to 815 Entertainment to
invest in the project and reflects GLPI’s creativity in crafting a
comprehensive construction financing solution. We look forward to
our relationship with 815 Entertainment.”
“Hard Rock’s incredible financial strength and
development trajectory is only made stronger with great partners
like GLPI and 815 Entertainment,” said Jon Lucas, Chief Operating
Officer for Hard Rock International. “We are really looking forward
to opening another world-class entertainment property with Hard
Rock Casino Rockford.”
CBRE Securities acted as financial advisor to
Gaming and Leisure Properties. SMBC Nikko Securities America, Inc.
and Jefferies LLC served as the exclusive financial advisors to 815
Entertainment, LLC.
About Gaming
and Leisure
PropertiesGLPI is engaged in the business of
acquiring, financing, and owning real estate property to be leased
to gaming operators in triple-net lease arrangements, pursuant to
which the tenant is responsible for all facility maintenance,
insurance required in connection with the leased properties and the
business conducted on the leased properties, taxes levied on or
with respect to the leased properties and all utilities and other
services necessary or appropriate for the leased properties and the
business conducted on the leased properties.
About 815 Entertainment815
Entertainment operates a Hard Rock branded casino in Rockford,
Illinois. The ~177,000 sq. ft. permanent casino is expected to open
in September 2024 and feature a ~60,000 sq. ft. gaming floor,
initially with 1,250 slot machines, 50 table games, and in-person
and online sportsbooks. The Company currently operates a ~37,800
sq. ft. temporary casino with a ~20,000 sq. ft. gaming floor, which
opened in November 2021. 815 Entertainment is owned by Dan Fischer,
the principal, along with a consortium of local investors and Hard
Rock International, which is also acting as the property
manager.
About Hard Rock®:Hard Rock
International (HRI) is one of the most globally
recognized companies with venues in over 70 countries spanning 290
locations that include owned/licensed or managed
Hotels, Casinos, Rock Shops®, Live Performance Venues and
Cafes. HRI also launched a joint venture named Hard Rock Digital in
2020, an online sportsbook, retail sportsbook and internet gaming
platform. Beginning with an Eric Clapton guitar, Hard
Rock owns the world’s largest and most valuable collection of
authentic music memorabilia at more than 87,000 pieces, which are
displayed at its locations around the globe. In 2023, Hard Rock
Hotels was honored by J.D. Power’s North America Hotel Guest
Satisfaction Index Study as the number one Upper Upscale Hotels
brand in Outstanding Guest Satisfaction for the fourth time over
the last five years. Hard Rock was also honored by Forbes among the
World’s Best Employers, as well as Best Employers for Women,
Diversity and New Grads, Best Brands for Social Impact, Customer
Service All-Star and a Top Large Employer in the Travel &
Leisure, Gaming, and Entertainment Industry. HRI became the first
privately-owned gaming company designated a U.S. Best Managed
Company by Deloitte Private and The Wall Street Journal in 2021,
and has since been honored threefold. In the 2022 Global Gaming
Awards, Hard Rock was named Land-Based Operator of the Year for the
second time in four years. In 2021, Hard Rock Hotels
& Casinos received first place ranking in
the Casino Gaming Executive Satisfaction Survey conducted
by Bristol Associates Inc. and Spectrum Gaming Group for six of the
last seven years. Hard Rock International currently holds
investment grades from primary investment rating agencies: S&P
Global Ratings (BBB) and Fitch Ratings (BBB). For more information
on Hard Rock International,
visit www.hardrock.com or shop.hardrock.com.
Forward-Looking
StatementsThis press release includes
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including our
expectations regarding the benefits of the transaction to our
shareholders. Forward-looking statements can be identified by the
use of forward-looking terminology such as “expects,” “believes,”
“estimates,” “intends,” “may,” “will,” “should” or “anticipates” or
the negative or other variation of these or similar words, or by
discussions of future events, strategies or risks and
uncertainties. Such forward-looking statements are inherently
subject to risks, uncertainties and assumptions about GLPI and its
subsidiaries, including risks related to the following: GLPI’s
ability to successfully consummate the announced transactions with
815 Entertainment, including the ability of the parties to satisfy
the various conditions to advancing loan proceeds, including
receipt of all required approvals and consents, or other delays or
impediments to completing the proposed transactions; the potential
negative impact of recent high levels of inflation (which have been
exacerbated by the armed conflict between Russia and Ukraine) on
our tenants' operations; GLPI's ability to maintain its status as a
REIT; our ability to access capital through debt and equity markets
in amounts and at rates and costs acceptable to GLPI; the impact of
our substantial indebtedness on our future operations; changes in
the U.S. tax law and other state, federal or local laws, whether or
not specific to REITs or to the gaming or lodging industries; and
other factors described in GLPI’s Annual Report on Form 10-K for
the year ended December 31, 2022, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K, each as filed with the Securities
and Exchange Commission. All subsequent written and oral
forward-looking statements attributable to GLPI or persons acting
on GLPI’s behalf are expressly qualified in their entirety by the
cautionary statements included in this press release. GLPI
undertakes no obligation to publicly update or revise any
forward-looking statements contained or incorporated by reference
herein, whether as a result of new information, future events or
otherwise, except as required by law. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed
in this press release may not occur as presented or at all.
Contact |
|
Gaming
and Leisure
Properties, Inc. |
Investor
Relations |
Matthew Demchyk, Chief
Investment Officer |
Joseph Jaffoni, Richard Land,
James Leahy at JCIR |
610/401-2900 |
212/835-8500 |
investorinquiries@glpropinc.com |
glpi@jcir.com |
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