VICI Properties, Penn National Gaming To Buy Greektown Casino-Hotel For $1 Bln
Real estate investment trust VICI Properties Inc. (VICI) said Wednesday that it has, together with Penn National Gaming, Inc. (PENN) agreed to acquire the real property and operations of the Greektown Casino-Hotel, located in downtown Detroit, Michigan, for an aggregate purchase price of about $1.0 billion in cash.
Under the terms of the agreements, VICI Properties will acquire the land and real estate assets of Greektown for about $700.0 million, and Penn National will acquire the operating assets of Greektown for approximately $300.0 million.
Simultaneous with the closing of this transaction, VICI Properties said it will enter into a triple-net lease agreement with Penn National related to Greektown. The lease will have an initial total annual rent of $55.6 million for an implied capitalization rate of 7.9 percent, with an initial term of 15 years, with four 5-year renewal options.
The rent coverage ratio in the first year after closing is expected to be 1.8x and the tenant’s obligations under the lease will be guaranteed by Penn National.
Opened in 2000, Greektown Casino-Hotel features 100,000 square feet of casino space, approximately 2,700 gaming machines and 60 table games, a poker room, three restaurants, five quick-serve food outlets, three bars and a coffee shop.
In addition, the casino has a AAA Four Diamond 400-room, luxury high-rise hotel with 14,000 square feet of event and catering space. The property employs approximately 1,800 team members and has partnered with nearly 20 local restaurants to offer fine dining rewards to guests.
VICI Properties said that the transaction is expected to close in mid-2019 and the acquisition is expected to be accretive immediately upon closing.
Separately, Penn National Gaming said it has entered into a definitive agreement to acquire the operations of Greektown Casino-Hotel in Detroit, Michigan for approximately $300 million in cash.
Penn will finance the transaction with a combination of cash on hand and debt. On a pro forma basis, and reflecting the October 15, 2018 completion of the acquisition of Pinnacle Entertainment and expected late fourth-quarter close of Margaritaville Resort Casino, the company continues to forecast to be at its target debt levels within 12 to 18 months.
Upon closing the Greektown transaction, Penn National’s portfolio of regional gaming facilities will increase to 41 properties in 19 jurisdictions.
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