VICI Properties, Penn National Buy Downtown Detroit Casino for $1B
DETROIT — VICI Properties Inc. (NYSE: VICI) and Penn National Gaming Inc. (NASDAQ: Penn) have purchased the Greektown Casino-Hotel in downtown Detroit for $1 billion in an all-cash deal. VICI Properties will be the majority owner, contributing approximately $700 million for the land and real estate assets. Penn National will supply the remaining $300 million for the operating assets.
VICI Properties, a New York-based REIT, simultaneously entered into a triple-net lease agreement with Penn National. The lease will have an initial rent of $55.6 million annually for 15 years with four five-year renewal options.
Greektown opened in 2000 and features over 10,000 square feet of casino space, about 2,700 gaming machines, three restaurants and a 400-room hotel. Greektown employs about 1,800 people.
“We are proud to expand our partnership with Penn National and add Greektown to our growing portfolio of market-leading gaming, hospitality and entertainment destinations,” says John Payne, president and chief operating officer of VICI Properties. “As the only casino located in Detroit’s historic Central Business District, Greektown, and its 30-story hotel tower, are ideally situated.”
The Detroit Free Press reports Dan Gilbert, founder of Quicken Loans and owner of the Cleveland Cavaliers, is the seller. Gilbert is expected to put the profits from the sale to use in Detroit. Greektown is near Little Caesar’s Arena, home to the Detroit Red Wings and Pistons; Ford Field, home to the Detroit Lions; and Comerica Park, home to the Detroit Tigers, as well as GM’s Renaissance Center and the Cobo Center.
Goldman Sachs & Co. LLC is VICI Properties’ financial adviser, and Kramer Levin Naftalis & Frankel LLP is its legal adviser. The transaction is expected to close in mid-2019.
VICI Properties owns 20 gaming facilities comprising more than 36 million square feet and features approximately 14,500 hotel rooms and more than 150 restaurants, bars and nightclubs. Its assets include Caesars Palace, six Harrah’s locations and four golf courses.
VICI Properties’ stock price closed on Wednesday, Nov. 14 at $21.44 per share, up from $18.50 a year ago.
Based in Wyomissing, Pa., Penn National Gaming operates 40 facilities in 18 markets. The company operates approximately 49,000 gaming machines, 1,200 table games and 9,000 hotel rooms.
Penn National Gaming’s stock price closed on Wednesday at $21.32 per share, down from $26.92 a year ago.
— Alex Tostado