Gaming and Leisure Properties Paying $175M for Tioga Downs Real Estate

Gaming and Leisure Properties (NASDAQ: GLPI) said today that it is paying $175 zillion for the property assets of Tioga Downs Casino Resort inward Nichols, NY.

Privately held American Racing & Entertainment, LLC is merchandising the earth to the Pennsylvania-based real estate investment funds trustingness (REIT). Related to the sale, the 2 sides are entering into a new, 30-year, triple-net let with an initial one-year lease of $14.5 1000000 at a capitalization place of 8.3%.

The initial annualized split coverage ratio for the rent is expected to be o'er 2.3x. Rent associated with the hire is content to a fixed 1.75% one-year escalation root with the first off anniversary and a rigid yearbook escalation of 2.0% first inwards yr fifteen of the take and carrying forrad through the balance of its term,” according to a statement.

Before the business deal for Tioga Downs, GLPI owned the real demesne assets of 61 gaming venues in 18 states. The REIT is entering New York for the for the first time clip through and through the dealings announced today.

Inside Tioga Downs

Tioga Downs sits on 162 acres and is home to a 32,600-square-foot casino featuring 895 expansion slot machines and 29 tabular array games. The venue also has a FanDuel sportsbook, a 160-room hotel, a 5/8-mile harness gymnastic horse track, heptad eateries and an 18-hole golf course.

GLPI’s purchase of the racino’s real acres may be well-timed because the manipulator already allocated $130 1000000 to heighten the property, having done so inwards 2016 when New House of York regulators granted it a Class III gaming permit.

Sale-leaseback deals, or SLBs, are unglamorous inward the gaming industry and often viewed as win-wins for casino operators and tangible acres companies. Through these agreements, a gaming company can buoy monetise land assets, often garnering large, upfront sums of hard currency to employ for anything, including to a greater extent acquisitions, shareholder rewards, such as buybacks and dividends, or to concentrate debt.

GLPI funded the acquisition of the Tioga Downs real demesne with immediate payment on deal and $20 one thousand thousand in equity. Citizens JMP Securities advised the REIT on the deal.

For GLPI, Prudent Move Into New York

With the purchase of Tioga Downs tangible estate, GLPI adds a unexampled tenant — its 9th — and exposure to another state.

The acquisition jibes with GLPI’s caterpillar track book of adding casino tangible demesne inwards to a lesser extent volatile markets and areas where the acquired locus faces little nearby competition. Tioga Downs checks both boxes, and that’s something to deliberate as New House of York pursues gaming expansion in the downstate region.

“Our locals-oriented attribute has a well-protected tributary market with no competition within 85 miles and a real loyal following. Its location largely insulates it from gaming enlargement in the downstate New House of York region,” said American Racing CEO Jeff Gural in the statement.

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