Gaming and Leisure Properties, Inc. (GLPI) has finalized the acquisition of the real estate assets of Tioga Downs Casino Resort in Nichols, New York. This strategic move underscores GLPI’s commitment to expanding its portfolio and solidifying its position as a leading real estate investment trust (REIT) in the gaming industry.
The acquisition deal, valued at $175 million, includes the purchase of Tioga Downs Casino Resort’s real estate assets from American Racing & Entertainment, LLC. As part of the agreement, GLPI has secured an initial annual rent of $14.5 million, reflecting an 8.3% capitalization rate. Furthermore, the lease entails annual escalations of 1.75% after the first year and a fixed 2.0% escalation starting in year fifteen, ensuring a steady income stream for GLPI over the long term.
Spanning approximately 162 acres, Tioga Downs Casino Resort stands as a beacon of entertainment in the Nichols, New York area. Boasting a wide range of amenities, including a 32,600-square-foot gaming floor featuring 895 slots and 29 table games, the property offers an immersive gaming experience for visitors. Additionally, the resort features a 2,500-square-foot FanDuel sportsbook, a 160-room hotel, a 5/8-mile harness horse track, seven food and beverage outlets, and an 18-hole championship golf course, making it a comprehensive destination for leisure and entertainment.
Peter Carlino, chairman and CEO of GLPI, expressed enthusiasm about the acquisition, highlighting the strategic value of Tioga Downs Casino Resort and the promising partnership with American Racing. Carlino emphasized Tioga Downs’ status as a high-quality asset with strong market positioning and significant geographic protection from competition. He underscored GLPI’s commitment to expanding its portfolio and maintaining its reputation as the gaming landlord of choice.
Jeff Gural, founder and CEO of American Racing, echoed Carlino’s sentiments, emphasizing Tioga Downs’ resilience against potential gaming expansion in the downstate New York region. Gural’s endorsement further solidifies the strategic significance of the acquisition for both parties involved.
The acquisition of Tioga Downs Casino Resort aligns with GLPI’s broader strategy of targeting stable markets with limited competition. With ownership of real estate assets in 18 states across the United States, GLPI has established itself as a prominent player in the gaming industry. The company’s focus on tax-motivated transactions domestically and exploration of international opportunities, particularly in the tribal gaming market, reflects its commitment to growth and diversification.
Analyst Barry Jonas from Truist Securities has expressed optimism about GLPI’s potential for mergers and acquisitions in the coming year. With a positive outlook and balance sheet flexibility, GLPI is well-positioned to explore strategic opportunities and maximize shareholder value. The company’s willingness to restructure leases and explore value-maximizing initiatives further demonstrates its proactive approach to portfolio management and growth.
GLPI’s acquisition of Tioga Downs Casino Resort marks a significant milestone in the company’s journey toward expansion and diversification. With a strategic vision, a robust portfolio, and a commitment to excellence, GLPI is poised to thrive in the dynamic landscape of the gaming industry.
