In a strategic transfer throughout the gaming sector, Gaming and Leisure Properties (GLPI) introduced the acquisition of the actual property property of two South Dakota casinos and one Nevada on line casino for a complete of $105 million. The acquired properties embrace the Silverado Franklin Hotel & Gaming Complex and the Deadwood Mountain Grand Casino in Deadwood, South Dakota, and Baldini’s Casino in Sparks, Nevada.
Lease agreements and funding:
Simultaneously with the acquisition, GLPI and Strategic Gaming Management will enter into two cross-defaulted triple-net lease agreements, every for an preliminary 25-year time period with two 10-year renewal intervals. GLPI has allotted $5 million for capital enhancements, bringing the entire funding to $110 million.
The new leases entail an preliminary combination annual hire of $9.2 million, inclusive of capital-improvement funding, representing an 8.4% capitalization price. Rent will bear a hard and fast 2% annual escalation beginning in 12 months three, with a CPI-based annual escalation starting in 12 months 11 of the larger 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 further diversify our portfolio, while expanding our tenant roster through our new relationship with Strategic, a dynamic and growing gaming operator.” The addition of Strategic’s properties brings GLPI’s portfolio to 65 properties in 20 states.
Strategic’s perspective:
As the source studies, CEO J. Grant Lincoln of Strategic Gaming Management emphasised the strategic match between the 2 corporations, stating, “As we explored the options for a sale-leaseback partner, GLPI rose above the rest, given their unique approach and emphasis on partnership, as well as their experience 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 lodge. With a deliberate lodge renovation in 2024, funded by GLPI’s capital enchancment proceeds, Silverado Franklin continues its legacy of excellence.
Deadwood Mountain Grand (DMG), established in 2011, provides 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 middle, 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 further workplace and assist area, contributing to its enchantment as an area gaming vacation spot.
Financial advisory:
Citizens JMP Securities acted because the monetary advisor to Gaming and Leisure Properties, whereas CBRE Securities served because the monetary advisor to Strategic Gaming Management.
In abstract, GLPI’s acquisition of the actual property property of Silverado Franklin, Deadwood Mountain Grand, and Baldini’s Casino underscores its strategic growth and dedication to fostering mutually helpful partnerships throughout the gaming trade. As GLPI continues to evolve its portfolio and discover progress alternatives, the acquisition marks a major milestone in its journey in the direction of sustained success and innovation.
