In a unanimous vote, four members of the Michigan Gaming Control Board voted on Tuesday, May 21, 2019, to sell the Greektown Casino Hotel in Downtown Detroit to Penn National Gaming, Inc. (PENN: Nasdaq) and the New York City-based Real to Real Estate Investment Trust (REIT), VICI Properties, Inc.
The $ 1 billion all-cash deal was first announced in November last year by gaming operator Jack Entertainment LLC. The gaming, hospitality and entertainment company is led by billionaire businessman Dan Gilbert, who is also the founder of Quicken Loans and owner of the NBA’s Cleveland Cavaliers.
According to Crains Detroit Business …
Vici Properties Inc., a New York-based REIT owned by Caesars Entertainment Corp. spun off in Las Vegas, announced last Thursday that the purchase of real estate and real estate in Detroit, Michigan, was completed in cash for approximately $ 700 million. The cash transaction of approximately $ 300 million of the Pennsylvania-based operator Wyomissing for the operating assets of the venue was also completed.
Last fall, the Detroit Free Press reported that the casino property in Greektown was worth about $ 400 million in debt. After Tuesday’s board meeting, Penn National Gaming CEO Timothy Wilmott announced that Gilbert’s team had run the casino in the dark.
By revenue, Greektown is the city’s third largest casino, followed by Motor City Casino Hotel and market leader MGM Grand Detroit. Wilmott was reportedly saying, “The fact that we are the smallest of the three casinos undoubtedly gives us room for improvement.”
The CEO added that while Penn National did not announce any immediate plans for physical changes to the Downtown Detroit property, they will call on John Drake as the venue’s new general manager.
The signing of several contracts followed a “strategic review” of the business portfolio of the Dan Gilbert company. It includes the sale of the JACK Cincinnati Casino property in Ohio and the Thoroughbred Thoroughbred race track in Northern Kentucky, Turfway Park, to its Hard Rock International subsidiary, NYC, REIT and Seminole Hard Rock Entertainment, Inc.
According to GlobeSt.com, John Payne, President and Chief Operating Officer of VICI, commented on the recent acquisition …
“The acquisition of Greektown is our second transaction with Penn National, which further strengthens our relationship with a world-class operator and demonstrates our commitment to delivering the highest quality, highest quality portfolio returns. Over the past five months, we’ve completed three major acquisitions, generating $ 1 billion in revenue and adding an annual rent of approximately $ 100 million. In addition, we have expanded our geographic diversity by extending it to two new jurisdictions.”
In the meantime, EPP and CFO of the New York firm, David Kieske, notes the following:
“We used the cash proceeds from our balance sheet, which we collected during our successful equity issue in November 2018, to fund the Greektown transaction. We remain committed to achieving long-term, neutral funding and will manage our balance sheet prudently to maximize transaction accretion while maintaining the flexibility to achieve long-term growth. ”
The Greektown Casino Hotel has been in operation since 2000 and features a 400-room high-rise hotel with four AAA diamonds and a 14,000-square-foot meeting and event space. The 100,000-square-foot casino offers around 2,700 slot machines and 60 table games, a poker room, three restaurants and seven fast-casual food stores, four bars and a café.