Cordish Companies offloads $1.81bn casino real estate assets to GLPI

Cordish Companies Live! Casino Hotel Philadelphia, Pennsylvania

Gaming and Leisure Properties has entered a strategic relationship that will see the group acquire the real estate assets of three Cordish Companies Live! casino facilities for $1.81bn.

This will see the former gain the real property assets of Live! Casino & Hotel Maryland, Live! Casino & Hotel Philadelphia, and Live! Casino Pittsburgh, including applicable long-term ground leases.

Cordish will immediately lease back all the properties, and continue uninterrupted to own, control and manage all the gaming operations of the facilities. 

The transaction includes not only the existing real estate assets, but also a binding partnership on future casino developments, as well as potential financing partnerships between the two parties in other areas of Cordish’s portfolio of real estate and operating businesses.

The Maryland transaction is expected to close by the close of the current year, with the Pennsylvania agreements anticipated to follow suit during the early stages of 2022, all subject to receipt of required regulatory approvals, financing and other customary closing conditions. 

GLPI expects to fund the total cash consideration payable by it at the closings using cash on hand, borrowings under its revolving credit facility and/or with funds from additional financing arrangements, which are expected to include issuances of debt and equity securities, or a combination.

David Cordish, chair of The Cordish Companies, explained: “We have long admired GLPI’s pioneering structure and accomplishments as a public platform. 

“Cordish is delighted to be partnering with GLPI on this range of transactions, which align two recognised leaders in their respective industries. Live! is iconic brand, and our commitment to our customers, team members and local communities as top priorities will continue unabated. 

“We look forward to continue delivering quality entertainment experiences in the markets we serve now, and collaborating and partnering with GLPI on opportunities to grow the Live! brand in the future.  

“Our election to receive a significant portion of our consideration in GLPI OP units stands testament to our recognition of GLPI’s significant underlying value and quality as a company, and the synergies we see between the two companies.”

The partnership will also see GLPI gain a right of first offer and first refusal on any sale-leaseback, or similar, transaction that Cordish pursues, in whole or in part, related to a specifically identified property in the firm’s Live! Entertainment District.

Furthermore, for a period of seven years following the closing of the transaction for the Pennsylvania properties, GLPI will co-invest with Cordish on any new gaming development project, excluding those involving currently-owned properties or existing gaming licensed facilities. GLPI will invest in 20 per cent of Cordish’s portion of the equity throughout the life of a project.

Peter Carlino, chair and CEO of GLPI, explained: “We are excited to establish a relationship with The Cordish Companies, one of the country’s preeminent developers of large-scale experiential real estate projects, casinos, hospitality and entertainment districts. 

“We have long admired Cordish for their creation of the highly successful ‘Live!’ brand across these entertainment, gaming and hospitality districts. A crucial aspect of our transaction was Cordish’s continued commitment to operating with the same team, approach, and standard of excellence that has brought their casinos so much success. 

“These new leases are expected to have strong rent coverage at an accretive cap rate while further expanding and diversifying our portfolio and marking a continuation of our strategy to build an industry leading, high quality tenant roster. 

“In addition to the real estate transaction for the three properties, we are excited to partner with Cordish on a range of future strategic opportunities that can leverage the financial and real estate development strengths and resources of both companies. 

“The OP unit portion of the transaction consideration aligns our interests with the goal of building new value for our constituents.”