Gaming and Leisure Properties has completed its previously announced $250m acquisition, from Blue Owl Capital, of the land on which Bally’s Corporation permanent Chicago Casino will be constructed.
The land purchase was one component of GLPI’s broader agreement with Bally’s, announced in July.
With the completion of GLPI’s purchase of the Chicago land, the current lease in place with Blue Owl Capital will be assumed by an affiliate of GLPI and amended to reflect the negotiated annual rent of $20 million, representing an initial cash yield of eight per cent. GLPI will own substantially all of the real estate and improvements related to the Chicago casino and hotel for a total investment of $1.19bn resulting in a blended initial cash investment yield of 8.4 per cent. Stabilized rent coverage for the lease is expected to be in the range of 2.0x – 2.4x.
Peter Carlino, Chairman and CEO of GLPI commented: “The completion of the Chicago land purchase is a significant milestone toward the development of Bally’s Chicago, which promises to be a must-visit destination casino resort property in the heart of Chicago. Our transactions with Bally’s related to Chicago and our real estate acquisitions at Bally’s Kansas City Casino and Bally’s Shreveport Casino & Hotel will be accretive to our financial results, resulting in an 8.3% blended initial cash yield and conservative rent coverage. We are pleased to be working with the Bally’s team, the host community and various stakeholders in Chicago to deliver a world-class entertainment center in the nation’s third largest metropolitan area.”
Bally’s Chicago has welcomed 1.3m guests to its temporary casino at the Medinah Temple in its first year, providing nearly $12.9m in local tax revenue.
George Papanier, President of Bally’s Corporation, said: “Since we first opened, we have strived to meet the commitments we made to the city of Chicago and are proud of how far we have come in just one year.”