Cordish to Sell Three East Coast Casinos in $1.8B Deal with Gaming and Leisure Properties
PHILADELPHIA, PITTSBURGH AND HANOVER, MD. — The Cordish Cos., a privately held retail entertainment and hospitality owner and operator based in Baltimore, has reached a sale-leaseback agreement with Gaming and Leisure Properties Inc. (NASDAQ: GLPI) for three of Cordish’s East Coast casinos. The properties include Live! Casino & Hotel Maryland, Live! Casino & Hotel Philadelphia and Live! Casino Pittsburgh.
Under terms of the agreement, Cordish will immediately lease back all the properties and continue to own, control and manage all the gaming operations of the facilities. The leases will have an initial term of 39 years, with a maximum term of 60 years inclusive of tenant renewal options.
The total price was approximately $1.8 billion, including applicable long-term ground leases. Consideration for the three-property real estate transactions will comprise a mix of qualified debt assumption (to be satisfied by GLPI), cash and $323 million of newly issued operating partnership units.
The transaction for the three properties includes a binding partnership on future Cordish casino developments. For seven years post-closing, GLPI will co-invest with Cordish on any new gaming development projects and provide 20 percent of Cordish’s equity on those projects. (This agreement excludes existing Cordish or third-party gaming licensed facilities.)
Additionally, the agreement includes potential financing partnerships between Cordish and GLPI in other areas of Cordish’s portfolio of real estate and operating businesses. GLPI will have a right of first offer and right of first refusal on any sale-leaseback or similar transaction that Cordish pursues.
The Maryland transaction is expected to close by the end of the year, and the Pennsylvania transactions are expected to close in early 2022. The sales are all subject to regulatory approvals, financing and other customary closing conditions. Wells Fargo Securities acted as financial advisor to GLPI on the transaction.
Cordish develops and operates dining, entertainment and hospitality destinations throughout the United States, many falling under the Live! brand. In addition to these three casinos, Cordish owns and operates the Hard Rock Hotel & Casino Hollywood and Hard Rock Hotel & Casino Tampa.
GLPI focuses on acquiring, financing and owning real estate leased to gaming operators in triple-net lease arrangements. The Wyomissing, Pa.-based firm’s portfolio includes 50 gaming properties in 17 states leased to tenants such as Penn National Gaming, Caesars Entertainment, Boyd Gaming Corp., Casino Queen and Bally’s. GLPI’s stock price closed on Monday, Dec. 6 at $46.45 per share, up from $41.96 a year ago.
— John Nelson