The sale of the Tropicana Las Vegas Casino Hotel Resort property is complete, but few changes are expected.
Gaming and Leisure Properties, Inc. (GLPI) announced Monday it has purchased the Tropicana from Penn National Gaming in exchange for rent credits of $307.5 million. The credits will be applied to rent due under existing leases over the next six months. Penn National will continue to operate the property for two years or until the Tropicana is sold.
“GLPI believes its collaborative and mutually beneficial outcome with Penn National provides us and our investor base greater visibility and predictability for rent receipts over the remainder of 2020,” Peter Carlino, GLPI's chairman and CEO, said in a news release on Monday.
The Tropicana, on the south end of the Las Vegas strip, and all Vegas casinos were closed in mid-March by Gov. Steve Sisolak because of the coronavirus pandemic. A stay-at-home order is in place in Nevada through April. The sale of the Tropicana is a move to strengthen Penn National’s liquidity during the crisis, which has shut down the company’s 41 facilities nationwide.
Penn National Gaming’s real estate spinoff, Gaming & Leisure Properties Inc., now owns the land under the Tropicana. https://t.co/660PMExOno— Las Vegas Review-Journal (@reviewjournal) April 20, 2020
GLPI will try to sell the Tropicana, it said in the news release. If it is sold within two years, Penn National could receive some of the net proceeds above the $307.5 million sale price.
In addition to the Tropicana sale, GLPI will lease Penn National’s planned casino in Morgantown, Pennsylvania. Penn National also has the option to buy GLPI’s Hollywood Casino in Perryville, Maryland, Jay Snowden, president and CEO of Penn National, said in a recent letter to investors.
Penn National suspended construction of new Pennsylvania casinos in Morgantown and Springettsbury Township, York County, after Pennsylvania Gov. Tom Wolf shut down non-essential businesses in mid-March.“We greatly appreciate the cooperation, creativity and partnership shown by GLPI during this challenging time,” Snowden said in his letter to investors. “While this transaction will help to relieve liquidity pressure in terms of rent obligations, we are committed to taking further steps to reduce our ongoing operating expenses in order to ensure we have a healthy business to return to when we are able to re-open our doors.”