Tropicana Las Vegas owner reports solid first-quarter results
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The 48 resort properties owned by Wyomissing, Pennsylvania-based Gaming and Leisure Properties Inc. are open and by next year more properties will be in the mix.
Executives with GLPI, a gaming-focused real-estate investment trust affiliated with Penn National Gaming that is expected to become the new owner of the Tropicana on the Las Vegas Strip, said Friday that its expanded relationship with Providence, Rhode Island-based Bally’s Corp. will result in additional annual revenue of $12 million once the deal closes next year.
GLPI announced the $308 million Tropicana Las Vegas transaction in mid-April and is expecting the deal to close early next year.
Bally’s, which is unaffiliated with property operating under the same name on the Strip, has agreed to spend $150 million to operate the Tropicana. GLPI will retain ownership of the land under the resort-casino and lease it back to Bally’s under an initial 50-year term for $10.5 million in annual rent, subject to increase.
The company also is acquiring the assets of Bally’s casino properties in Rock Island, Illinois, and Black Hawk, Colorado. Those assets are expected to be added to a previously announced Bally’s master lease for Tropicana Evansville and Dover Downs Hotel and Casino properties, expected to be completed by mid-2021.
“We are delighted to expand and diversify our relationship with Bally’s through transactions that deliver strong rent coverage and an accretive cap rate,” said GLPI Chairman and CEO Peter Carlino.
“By adding to the planned master lease with Bally’s, securing rights of first refusal on potential future assets and converting the Tropicana Las Vegas into an income producing ground lease, we expect to drive incremental cash flows while maintaining a strong balance sheet,” Carlino said. “We expect our tenants’ strength, combined with our standing as the sector’s only investment-grade balance sheet, to allow GLPI to consistently grow its cash flows and build value for shareholders in 2021 and beyond.”
GLPI reported strong first-quarter net income results of $127.2 million, 54 cents a share, on revenue of $301.5 million for the quarter that ended March 31. That compares with net income of $96.9 million, 45 cents a share, on revenue of $283.5 million in the same quarter a year earlier.
rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
