Gaming and Leisure Properties Acquires Land Under Hard Rock Casino Rockford For $100 Million

On 30 August 2023, reputable real-estate investment company Gaming and Leisure Properties, Inc. (GLPI) acquired the land designated for the Hard Rock Casino development project in Rockford, Illinois from 815 Entertainment, the Illinois-based operator of the Hard Rock-branded casino. The acquisition reportedly worth $100.0 million is complemented with a ground lease agreement between GLPI and 815 Entertainment for a period of 99 years.

Comprehensive Acquisition Deal

As reported by GLPI, the ground lease agreement includes an initial $8.0 million annual rent with an option to adjust the annual rate up to 2.0% upon expiry of the first year of the lease to remain fixed over the entire term of the agreement. In addition, the ground lease anticipates that GLPI shall provide development funding at the level of $150 million through a separate delayed draw term loan deal reportedly subject to a 10% interest rate and payable once the Hard Rock Casino Rockford is opened in September 2024 as expected.

In addition to the acquisition and ground lease agreements, GLPI stipulated to have a right of first refusal regarding any building improvements of the casino property in case of a decision to sell them once they are completed.

$358 Million Casino Development Project

The land associated with Hard Rock Casino is mainly located near the Interstate 90 in Rockford, Illinois and spreads over some 177,000 sq. The casino is under construction at the moment and is set to feature a 60,000-square-foot gaming floor with 1,250 slot machines, 50 table games, and retail and online sports wagering facilities. According to GLPI, the Hard Rock Casino Rockford development project is estimated at $358 million with around $120 million funded to date.

Peter Carlino, GLPI’s Chairman and CEO, reportedly commented: “Our agreements with 815 Entertainment will allow GLPI to expand its footprint with the addition of a new ground lease, a new tenant, and a commitment to provide potential funding. We believe this is an attractive ground lease transaction for our shareholders as the strong initial results at 815 Entertainment’s temporary facility demonstrate the strength of the location and the depth of the market.”

Carlino added: ”The Hard Rock brand is world renown and will support and solidify the new casino’s position as a tourist destination and entertainment venue. Hard Rock is the property manager and an equity investor in 815 Entertainment, bringing its world-class management team to the project.”

$250 Million Available to Seller

According to the CEO, the structure of the overall financial solution makes $250 million available for 815 Entertainment for further project investments and joint ventures with GLPI. Jon Lucas, Chief Operating Officer for Hard Rock International, reportedly said: “Hard Rock’s incredible financial strength and development trajectory is only made stronger with great partners like GLPI and 815 Entertainment. We are really looking forward to opening another world-class entertainment property with Hard Rock Casino Rockford.”