Gaming and Leisure Properties has completed the acquisition of the land on which Bally’s permanent Chicago casino is to be constructed.

Bally's

The US$250m land acquisition is part of an agreement between GLPI and Bally’s which was announced in July.

With the completion of GLPI’s purchase of the Chicago land, the current lease in place with Blue Owl Capital will be assumed by an affiliate of GLPI and amended to reflect the negotiated annual rent of $20m, representing an initial cash yield of 8.0 per cent.

GLPI will own substantially all of the real estate and improvements related to the Chicago casino and hotel for a total investment of $1.19bn resulting in a blended initial cash investment yield of 8.4 per cent. Stabilised rent coverage for the lease is expected to be in the range of 2x – 2.4x.

“The completion of the Chicago land purchase is a significant milestone toward the development of Bally’s Chicago, which promises to be a must-visit destination casino resort property in the heart of Chicago,” said Peter Carlino, chairman and CEO of GLPI.

“Our transactions with Bally’s related to Chicago and our real estate acquisitions at Bally’s Kansas City Casino and Bally’s Shreveport Casino & Hotel will be accretive to our financial results, resulting in an 8.3 per cent blended initial cash yield and conservative rent coverage.

“We are pleased to be working with the Bally’s team, the host community and various stakeholders in Chicago to deliver a world-class entertainment centre in the nation’s third largest metropolitan area.”