In a strategic transfer inside the gaming sector, Gaming and Leisure Properties (GLPI) introduced the acquisition of the true property property of two South Dakota casinos and one Nevada on line casino for a complete of $105 million. The acquired properties embody the Silverado Franklin Resort & Gaming Complicated and the Deadwood Mountain Grand On line casino in Deadwood, South Dakota, and Baldini’s On line casino in Sparks, Nevada.
Lease agreements and funding:
Concurrently with the acquisition, GLPI and Strategic Gaming Administration will enter into two cross-defaulted triple-net lease agreements, every for an preliminary 25-year time period with two 10-year renewal durations. GLPI has allotted $5 million for capital enhancements, bringing the overall funding to $110 million.
The brand new leases entail an preliminary mixture annual hire of $9.2 million, inclusive of capital-improvement funding, representing an 8.4% capitalization fee. Hire will endure a set 2% annual escalation beginning in 12 months three, with a CPI-based annual escalation starting in 12 months 11 of the higher of two% or CPI capped at 2.5.
Peter Carlino, GLPI’s chairman and CEO, expressed enthusiasm in regards to the acquisition, stating, “With our acquisition of the Silverado, DMG, and Baldini’s, we additional diversify our portfolio, whereas increasing our tenant roster by our new relationship with Strategic, a dynamic and rising gaming operator.” The addition of Strategic’s properties brings GLPI’s portfolio to 65 properties in 20 states.
Strategic’s perspective:
Because the supply stories, CEO J. Grant Lincoln of Strategic Gaming Administration emphasised the strategic match between the 2 firms, stating, “As we explored the choices for a sale-leaseback associate, GLPI rose above the remainder, given their distinctive strategy and emphasis on partnership, in addition to their expertise as gaming operators.” Lincoln highlighted Strategic’s dedication to bottom-line outcomes and ongoing progress in aggressive gaming markets.
Silverado Franklin, a pioneering gaming property in South Dakota since its opening in 1990, boasts 245 slots, 16 desk video games, two eating places, 4 bars, and a 68-room resort. With a deliberate resort renovation in 2024, funded by GLPI’s capital enchancment proceeds, Silverado Franklin continues its legacy of excellence.
Deadwood Mountain Grand (DMG), established in 2011, presents a various gaming expertise with 141 slots, 8 desk video games, two meals and beverage areas, a 208-space parking storage, a sportsbook, and an occasion heart, all sprawled throughout an 11-acre property in Deadwood.
Baldini’s, positioned in Sparks, Nevada, options 492 slot machines in a 43,000-square-foot on line casino that opened its doorways in 1988. The property additionally features a sportsbook, eating places, bars, ample parking, and extra workplace and assist area, contributing to its enchantment as an area gaming vacation spot.
Monetary advisory:
Residents JMP Securities acted because the monetary advisor to Gaming and Leisure Properties, whereas CBRE Securities served because the monetary advisor to Strategic Gaming Administration.
In abstract, GLPI’s acquisition of the true property property of Silverado Franklin, Deadwood Mountain Grand, and Baldini’s On line casino underscores its strategic growth and dedication to fostering mutually useful partnerships inside the gaming business. As GLPI continues to evolve its portfolio and discover progress alternatives, the acquisition marks a big milestone in its journey in direction of sustained success and innovation.
