Gaming and Leisure Properties, Inc. (GLPI) just unveiled plans of its recent purchases of three casinos based in South Dakota and Nevada, totaling $105 million. The list of properties includes the widely-celebrated Silverado Franklin Hotel & Gaming Complex and the Deadwood Mountain Grand located in Deadwood, South Dakota, and the well-established Baldini’s Casino in Sparks, Nevada. With this strategic move, not only is GLPI exploring the South Dakota market for the first time, but it also intends to augment its holdings in Nevada.
GLPI Broadens Reach with $110M Infusion into Gaming Venues
The gross investment that GLPI is committing amounts to $110 million. A clear provision of $5 million from this fund will be directed towards enhancing the quality of the newly purchased locations. As part of this venture, GLPI and Strategic Gaming Management, LLC (Strategic) are set to ink two cross-defaulted triple-net lease agreements. Each agreement is set to span an initial 25-year duration with an option for two renewals of a 10-year term each. The drafted lease agreements kick off with an annual rent aggregating to $9.2 million, inclusive of funds allocated for enhancements, with an investment yield of around 8.4%.
Peter Carlino, GLPI’s Chairman and CEO, voiced his excitement about the acquisition, stating:
“The purchase of the Silverado, DMG, and Baldini’s outlets allows us the pleasure of diversifying our portfolio of properties while simultaneously broadening our tenant base with our newly formed alliance with Strategic, a rapidly proliferating operator in the gaming field. We are hoping the introduction of Strategic’s properties into our portfolio will boost our catalog to a whopping 65 properties across 20 states with 9 tenants, which is anticipated to make an immediate and significant positive impact on GLPI’s operating results.”
Carlino complimented J. Grant Lincoln, CEO of Strategic Gaming Management, for his exceptional leadership. He underlined that Strategic Gaming Management has potent market standing and growth trajectories. However, he underscored the strategic priority of remitting first refusal on future acquisitions from Strategic until its adjusted EBITDAR relating to assets owned by GLPI reaches a yearly threshold of $40 million.
Strategic Gaming Management CEO Applauds Partnership with GLPI
J. Grant Lincoln, CEO of Strategic Gaming Management, reciprocated the sentiment of excitement about the proposal: “Our business approach, shaped by years of triumph in challenging gaming markets, is fine-tuned towards optimizing bottom-line performance. Our infrastructure is favorably poised for thoughtful, continuous progression. As we navigated through potentials for a sale-leaseback associate, GLPI overshadowed other contenders owing to their distinctive stance and solid emphasis on collaboration, as well as their intensive background as gaming operators.”
The Silverado Franklin Hotel & Gaming Complex, opened its doors in 1990 and is among the biggest gambling venues in South Dakota. It showcases 245 slot machines, 16 table games, two prominent restaurants, four bars, and a 68-room hotel. The Silverado property is in the process of undergoing significant renovations which will be partly financed from the $5 million enhancement fund set by the GLPI.
The other South Dakota property, Deadwood Mountain Grand stretches across 11 acres. It houses 141 slot machines, eight table games, two eateries and drinkstations, a spacious 208-vehicle parking garage, a 67-seat sportsbook, and a whopping 13,500-square-foot event venue.
Lastly, the acquisition included Baldini’s Casino in Nevada, situated in Sparks. It is spread across approximately nine acres and offering 492 slot machines, various dining options along with bars, a 2,000-square-foot sportsbook, with added office and auxiliary space. This transaction signifies GLPI’s portfolio expansion to include four properties in Nevada, extending its footprint beyond Reno-Sparks.
