Gaming and Leisure Properties acquires land under Illinois Hard Rock Casino
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Gaming and Leisure Properties Inc. has acquired the land associated with the Hard Rock Casino development project in Rockford, Ill., from an affiliate of 815 Entertainment LLC for $100 million.
At the same time it acquired the land, Gaming and Leisure Properties entered into a 99-year ground lease with 815 Entertainment. The initial annual rent for the ground lease is $8 million, subject to fixed 2% annual escalation beginning on the first anniversary of the lease.
Wyomissing-based Gaming and Leisure Properties has also committed to providing up to $150 million of development funding via a senior secured delayed draw term loan, subject to regulatory review. Any borrowings will be subject to an interest rate of 10%, according to a press release. The term loan has a draw period of up to 1-year and a maximum outstanding period of up to six years — a 5-year initial term with a 1-year extension. The term loan can be prepaid without penalty following the opening of the Hard Rock Casino in Rockford, which is expected in September 2024.
According to Peter Carlino, chairman and CEO of Gaming and Leisure Properties, the agreements with 815 Entertainment will allow Gaming and Leisure Properties to expand its footprint with the addition of a new ground lease, a new tenant and a commitment to provide potential funding.
“We believe this is an attractive ground lease transaction for our shareholders as the strong initial results at 815 Entertainment’s temporary facility demonstrate the strength of the location and the depth of the market,” he said in a statement. “The Hard Rock brand is world renown and will support and solidify the new casino’s position as a tourist destination and entertainment venue.”
Hard Rock is the property manager and an equity investor in 815 Entertainment.
Carlino added that the structure of the overall transaction will make $250 million available to 815 Entertainment to invest in the project and reflects GLPI’s creativity in crafting a comprehensive construction financing solution.
In conjunction with the transactions, Gaming and Leisure Properties will receive a right of first refusal on the building improvements of the Hard Rock Casino in Rockford if there is a future decision to sell them once completed, according to the company.
“Hard Rock’s incredible financial strength and development trajectory is only made stronger with great partners like GLPI and 815 Entertainment,” Jon Lucas, chief operating officer for Hard Rock International, said in a statement.
The Hard Rock Casino in Illinois will consist of approximately 177,000 total square feet, including about 60,000 square feet of gaming floor. The facility will feature an initial 1,250 slot machines, 50 table games, and in-person and online sportsbooks. The project has a total projected budget of approximately $358 million, with approximately $120 million spent to date.
