Cordish enters into sale-leaseback agreement for three Live! casinos with GLPI real estate trust
Based in Maryland Cordial Companies will sell its three casino properties, Live! Maryland Casino and Hotel, Live! Casino & Hotel Philadelphia, and Live! Pittsburgh Casino, a Pennsylvania-based real estate investment trust specializing in gaming sites, Gaming and Leisure Properties (GLPI), in a transaction valued at $ 1.8 billion.
cordial will lease the properties and ‘will continue uninterruptedly to own, control and manage all gaming operations of the facilities“, According to the statement from GLPI Monday. This sale-leaseback transaction could provide Cordish liquidity to finance new projects or extend existing ones, said experts in the gaming and real estate industries, as reported by Baltimore sun.
The transaction for the three properties includes not only the existing real estate assets, but also a binding partnership on the future developments of the Cordish casino, as good as potential financing partnerships between GLPI and Cordish in other areas of Cordish’s real estate and operating portfolio. Gaming and recreation properties will also have a right of first offer or refusal for any future sale-leaseback transaction, or similarly structured deals, which Cordish is pursuing over the next five years, the statement said.
“We look forward to continuing to deliver quality entertainment experiences in the markets we currently serve, and to collaborate and partner with [Gaming and Leisure Properties] on the opportunities to develop Live! brand in the future, ”said David Cordish, President of Cordish Cos., in a report.
GLPI will enter a new triple-net main lease with Cordish for Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh, as well a unique lease for Live! Casino & Hotel Maryland. The main lease and the single asset lease will have an initial term of 39 years, with a maximum term of 60 years, including tenant renewal options. The first one the annual cash rent for the three properties will be $ 125.0 million, with a fixed annual escalator of 1.75% on the total rent from the second anniversary of the leases, representing a 6.9% capitalization rate.
The sale of the Maryland property is Expected to close by the end of this year, while the Pennsylvania deal is expected to close in early 2022, according to the companies. Sales are subject to necessary approvals by state gaming regulators.
By taking over the casino’s real estate, GLPI will assume a portion of the debt associated with the properties and pay Cordish an undisclosed cash amount as well as to grant the Baltimore Development Corporation $ 323 million in newly issued operating partnership units in the REIT.
“We are delighted to establish a relationship with The Cordish Companies, one of the nation’s leading developers of large scale experiential real estate, casinos, hospitality and entertainment districts,” said Peter Carlino, President and CEO of Gaming and Leisure Properties.
Cordish’s other casino properties are located in Tampa and Hollywood, Florida, and she operates a Bally Sports Live entertainment complex in St. Louis. The company was trying to develop a casino in Richmond, Virginia, but voters just voted against a referendum to allow a casino in the city.
The company’s portfolio also includes hotels, shopping centers, apartment buildings and offices. His work includes Johns Hopkins University’s Hopkins Square, Towson Square, Ocean City outlets, and Spark Baltimore, a collaborative workspace adjacent to Power Plant Live! near the inner harbor. It has similar entertainment developments in Atlanta; Kansas City, Missouri; Philadelphia Cream; Arlington, Texas; and elsewhere.