Penn Entertainment Works Out New Lease Agreement With Gaming & Leisure
Game and leisure properties (NASDAQ: GLPI) announced that it has agreed to create a new head lease with Penn Entertainment (NASDAQ: PENN) for seven current properties.
The companies also agreed on a funding mechanism to support PENN’s continued relocation. and development opportunities in several of the properties included in the new head lease.
The new anchor tenant will add Penn properties in Aurora and Joliet, Illinois; Columbus and Toledo, Ohio; and Henderson, Nevada. In addition, the existing leases for Hollywood Casino at The Meadows in Pennsylvania and Hollywood Casino Perryville in Maryland will terminate and these properties will transfer into the new head lease. GLPI has agreed to fund up to $225 million for the relocation of PENN’s riverside casino to Aurora at a capitalization rate of 7.75% and to fund up to $350 million for the relocation of Hollywood Casino Joliet as well as the construction of hotels at the Hollywood Casino Columbus and a second hotel tower at the M Resort Spa Casino at then prevailing market rates.
For its part, GLPI said the company is pleased to structure a new head lease with a long-term tenant that includes a financing option to enable PENN to extend its legacy of growth through development by pursuing exciting opportunities in Illinois, Ohio and Nevada.
The transaction is subject to customary regulatory approvals and is expected to be effective on January 1, 2023.