Transactions and financing deals are happening across the country, including a $1-billion transaction for two Bally’s properties.
Bally’s agrees to sell two RI real property assets to GLPI for $1B
Bally’s Corporation has entered into a binding term sheet with GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties Inc., to acquire the real property assets of Bally’s two Rhode Island casino properties—Bally’s Twin River Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel—subject to customary regulatory approvals, with Lincoln also subject to lender consent.
Pursuant to the terms of the transaction, Bally’s will immediately lease back both properties and continue to own, control and manage all the gaming operations of the facilities on an uninterrupted basis. Total consideration for the acquisition is $1 billion.
“Bally’s is excited to enter into this transaction with GLPI, further strengthening our growing relationship,” said Bobby Lavan, CFO, Bally’s. “The transaction will provide the company with significant, long-term liquidity, ensuring that Bally’s is best positioned to continue executing its capital and strategic plan, as well as to capitalize on future opportunities presented in the market.”
Both properties are expected to be added to the existing Bally’s Master Lease between GLPI and Bally’s, with incremental rent of $76.3 million. The master lease has an initial term of 15 years (with 14 years remaining) followed by four five-year renewals at the tenant’s option. Normalized rent coverage on the master lease—which includes Bally’s Dover Casino Resort, Bally’s Evansville Casino & Hotel, Bally’s Quad Cities Casino & Hotel and Bally’s Black Hawk Casinos—is expected to be 2.0x in the first calendar year following the completion of the acquisition of the real property assets of Bally’s Rhode Island properties.
In connection with GLP’s commitment to consummate the Bally’s acquisitions, it also agreed to pre-fund, at Bally’s election, a deposit of up to $200 million, which will be credited or repaid to GLP at the earlier of closing and Dec. 31, 2023. In addition, Bally’s will pay a $9 million transaction fee at closing.
If all third-party consents and approvals for the acquisition of Lincoln are not timely received, then GLP will instead acquire the real property assets of the Hard Rock Hotel & Casino Biloxi in Mississippi, along with Tiverton for total consideration of $635 million and a combined annual rent for Tiverton and Biloxi of $48.5 million. In that event, GLP will also have the option, subject to receipt of required consents, to acquire the real property assets of Lincoln prior to Dec. 31, 2024, for a purchase price of $771 million and additional rent of $58.8 million.
Pebblebrook sells The Marker San Francisco for $77M
Pebblebrook Hotel Trust has closed on the sale of the 208-room The Marker San Francisco in San Francisco for $77 million to an undisclosed third party.
For the trailing twelve months ended May 31, the hotel’s estimated net operating loss was $2 million, and its estimated Hotel EBITDA was -$1.8 million. Based on the hotel’s operating performance for 2019, the $77 million sales price reflects a 10.0x EBITDA multiple and an 8.8% net operating income capitalization rate. The net operating income or loss for both periods mentioned above is after an assumed annual capital reserve of 4% of total hotel revenues.
Prior to the sale of The Marker San Francisco, the company had a $25 million renovation planned for the property. Proceeds from the sale will be used for general corporate purposes and reducing the company’s outstanding debt borrowings associated with recent hotel acquisitions, in accordance with the company’s investment strategy.
Churchwick Partners and Rockledge complete Sonesta portfolio acquisitions
In conjunction with Churchwick Partners, David Kaye and Joe Listhaus of Rockledge completed their Sonesta portfolio acquisition by adding another 347 keys across three hotels in three separate states. The assets included Sonesta ES Suites in St. Louis, Sonesta ES Suites Minneapolis in Eagan, MN and Simply Suites Detroit Southfield in Southfield, MI.
Last month, Churchwick and Rockledge closed on the first portion of the portfolio consisting of seven Sonesta hotels, which accounted for 1,085 keys across six states.
“Being able to execute a complicated transaction and financing in one of the worst credit environments in the last 10 years is a continued testament to our differentiated approach,” said Jaime Gitler, a partner at Churchwick Partners. “The wealth of experience in capital markets coupled with a best-in-class operational team continues to position Rockledge and Churchwick as preferred partners to sellers. History will show that execution in this time period will be a defining highlight in our storied enterprise.”
Mag Mile Capital secures $8.6M loan Baltimore Hotel
Mag Mile Capital agent Francisco Nacorda recently closed a loan for a 250-room Days Inn situated in downtown Baltimore.
The company is a boutique-sized firm that offers preferred access nationwide to high-leverage, non-recourse, commercial real estate bridge loans and permanent mortgages with cash out for hotels, self-storage, multifamily, industrial, retail, office, and other commercial real estate properties.
The property is near the city’s historic districts like the grave and former home of Edgar Allan Poe, Oriole Park at Camden Yards and the waterfront district of Baltimore’s Inner Harbor.