Gaming & Leisure Properties and PENN Entertainment Agree to New Master Lease Terms and Development Funding
10 Outubro 2022 - 8:30AM
Gaming & Leisure Properties, Inc. (“GLPI” or the
“Company”) (Nasdaq: GLPI) announced today that it agreed to create
a new master lease with PENN Entertainment, Inc. (“PENN”) (Nasdaq:
PENN) for seven of PENN’s current properties. The companies have
also agreed to a funding mechanism to support PENN’s pursuit of
relocation and development opportunities at several of the
properties included in the new master lease. The transaction,
including the creation of the new master lease, is subject to
customary regulatory approvals and is expected to be effective
January 1, 2023.
Pursuant to the terms agreed upon by the
parties, the current PENN master lease will be amended to remove
PENN’s properties in Aurora and Joliet, Illinois; Columbus and
Toledo, Ohio; and Henderson, Nevada and those properties will be
added to the new master lease. In addition, the existing leases for
the Hollywood Casino at The Meadows in Pennsylvania and Hollywood
Casino Perryville in Maryland will terminate and these properties
will be transferred into the new master lease. GLPI has agreed to
fund up to $225 million for the relocation of PENN’s riverboat
casino in Aurora at a 7.75% cap rate and to fund up to $350 million
for the relocation of the Hollywood Casino Joliet as well as the
construction of hotels at Hollywood Casino Columbus and a second
hotel tower at M Resort Spa Casino at then current market
rates.
The new master lease and GLPI’s funding
commitment will allow PENN to pursue several growth projects
including the planned projects in Aurora and Joliet, Illinois;
Columbus, Ohio; and Henderson, Nevada.
Peter Carlino, Chief Executive Officer of Gaming
& Leisure Properties, commented, “Our ongoing support of our
roster of leading regional gaming operator tenants through
innovative transaction structures has proven to be mutually
beneficial and we are confident that this new master lease with
PENN Entertainment will extend our record of success on this
front.
“Throughout its 28 years as a public company,
PENN Entertainment has emerged as the industry’s pre-eminent
developer of regional gaming assets. GLPI is excited to structure a
new master lease with our long-term tenant that includes a funding
option to allow PENN to extend its legacy of growth through
development by pursuing attractive opportunities in Illinois, Ohio
and Nevada. We support the relocation of PENN’s riverboat casinos
to land-based operations as we believe this provides a superior
guest experience, particularly as the proposed Aurora and Joliet
properties are sited to benefit from existing and long-term
traffic-driving developments. Further, we believe the creation of a
new hotel at Hollywood Casino Columbus will significantly improve
the performance of that property and ultimately enable PENN to
transform it into a regional destination. Finally, as with every
transaction we pursue at GLPI, this new master lease structure
comes with attractive rent and financing terms for both parties
under a proven master lease structure that offers GLPI material
downside protection while offering us an opportunity to benefit
from PENN’s long-term growth.”
The terms of the new master lease and the
amended PENN master lease are expected to be substantially similar
to the current PENN master lease with the following key
differences:
- The new master lease will be
cross-defaulted, cross-collateralized and co-terminus with the
existing PENN master lease
- The initial term of the new master
lease will expire on 10/31/2033, with three 5-year extensions at
PENN’s option (consistent with the term remaining on the current
Penn master lease)
- All rent in the new master lease
will be fixed with annual escalation of 1.50%, with the first
escalation occurring for the lease year beginning on November 1,
2023
- The rent for the new lease will be
$232.2 million in base rent. The rent for the original PENN master
lease will be $284.1 million, consisting of $208.2 million of
Building Base Rent, $43.0 million of land base rent, and $32.9
million of percentage rent.
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.
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 the
successful relocation of facilities and completion of planned
projects, the anticipated benefits of the transactions to GLPI, and
the expected impact of the planned capital expenditures on PENN’s
results of operations. 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 PENN, including the ability of the parties to
reach definitive agreements, receipt of all required regulatory
approvals, or other delays or impediments to completing the
proposed transactions; PENN’s ability to secure all necessary
approvals and permits necessary for the announced capital projects;
construction factors, including delays, unexpected remediation
costs, increased cost of labor and materials and other factors that
could significantly increase the necessary capital expenditure; the
effect of pandemics, such as COVID-19, on GLPI as a result of the
impact such pandemics may have on the business operations of GLPI’s
tenants and their continued ability to pay rent in a timely manner
or make investments in GLPI’s properties; 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 and ability to access the capital markets
for necessary financing; GLPI's ability to maintain its status as a
REIT; GLPI’s 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, 2021, 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.
ContactGaming
and Leisure
Properties, Inc.
Matthew Demchyk, Chief
Investment Officer
610/401-2900
investorinquiries@glpropinc.com
Investor RelationsJoseph
Jaffoni, Richard Land, James Leahy at
JCIR212/835-8500glpi@jcir.com
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