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Real estate investment trust (REIT) Gaming and Leisure Properties Incorporated (GLPI) has agreed to buy three top casino properties from the Cordish Company in a US$1.81 billion leaseback deal (£1.37bn/€1.6bn).
The deal for the Live! Casino Maryland and two Live! Casinos in Philadelphia and Pittsburgh, which together welcome over 55 million punters a year, covers existing Cordish debt on the properties and is made up of a further US$323 worth of new shares (£244m/€285m), issued on the arrangement, and an undisclosed sum of cash.
GLPI, a REIT specializing in casino properties, based in Wyomissing, Pennsylvania, is a 2013 corporate spin-off from Penn National Gaming.
It will lease the casinos back to Cordish for an initial annual rent of US$125 million (£94.5m/€110.4m), rising by 1.75 per cent every year up to a maximum 60-years. The transaction is expected to complete by early next year.
In addition, the two companies have signed a “binding partnership” for future financing and development deals, which also gives GLPI something approaching first refusal on partnering Cordish real estate projects.
“We have long admired Cordish for their creation of the highly successful ‘Live!’ brand across entertainment, gaming and hospitality,” said GLPI Chair and CEO Peter Carlino.
“We are excited to establish a relationship with [them], one of the country’s pre-eminent developers of large-scale experiential real estate projects, casinos, hospitality and entertainment districts.
“We are [also] excited to partner with Cordish on a range of future strategic opportunities that can leverage the financial and real estate development strengths and resources of both companies.”
David Cordish, Chair of the Cordish Companies, founded in 1910, responded: “[We] are delighted to be partnering with GLPI on this range of transactions, which align two recognised leaders in their respective industries.
“We look forward to continue delivering quality entertainment experiences in the markets we serve now and collaborating and partnering with GLPI on opportunities to grow the Live! brand in the future.”