New York-listed Gaming and Leisure Properties (GLPI) has completed the $250 million acquisition of land on which Bally’s permanent Chicago Casino will be constructed.
The land purchase from Blue Owl Capital is one component of GLPI’s broader agreement with Bally’s, which was announced in July.
Following completion of GLPI’s purchase of the Chicago land, the current lease in place with Blue Owl Capital will be assumed by an affiliate of GLPI and amended to reflect the negotiated annual rent of $20 million, representing an initial cash yield of 8.0 per cent.
GLPI will own substantially all of the real estate and improvements related to the Chicago casino and hotel for a total investment of $1.19 billion, resulting in a blended initial cash investment yield of 8.4 per cent.
“The completion of the Chicago land purchase is a significant milestone toward the development of Bally’s Chicago, which promises to be a must-visit destination casino resort property in the heart of Chicago,” said GLPI chairman and chief executive Peter Carlino. “Our transactions with Bally’s related to Chicago and our real estate acquisitions at Bally’s Kansas City Casino and Bally’s Shreveport Casino & Hotel will be accretive to our financial results, resulting in an 8.3 per cent blended initial cash yield and conservative rent coverage.
“We are pleased to be working with the Bally’s team, the host community and various stakeholders in Chicago to deliver a world-class entertainment center in the nation’s third largest metropolitan area.”
Shares in Gaming and Leisure Properties Inc (NASDAQ:GLPI) closed 0.26 per cent lower at $52.21 per share in New York Wednesday, just off their 52-week high of $52.60 per share.