Greektown Casino Sold to Penn National, VICI Properties for $1 Billion
Penn National Gaming and VICI Properties have joined forces to buy the Greektown Casino-Hotel in Detroit, Michigan from JACK Entertainment for a cool $1 billion. Greektown, which opened almost exactly 18 years ago, was owned by JACK Entertainment since 2013.
It may sound odd that two companies would team up to own a casino, but the deal breaks down quite sensibly. Penn National paid $300 million of the $1 billion to acquire Greektown’s gaming operations, while VICI shelled out the other $700 million for the real estate and land. As part of the deal, Penn National will enter into a triple net lease agreement with VICI to effectively control Greektown.
In a triple net lease, the tenant, Penn National, rents the property from the landlord, VICI, and is responsible to taking care of property maintenance, property taxes, and building insurance. Penn National will rent Greektown from VICI for $55.6 million per year for a 15-year term. There will be four 5-year renewal options.
In a press release, Penn National’s Chief Executive Officer Timothy Wilmott said:
Detroit is undergoing an exciting renaissance as a result of billions of dollars of new investments in the city’s residential, commercial, entertainment and cultural center, all of which are driving new residents, businesses, tourists and employment to the downtown area. Greektown is the only casino in the heart of downtown, and we look forward to welcoming patrons from the many nearby attractions, such as Comerica Park, Ford Field, Little Caesars Arena, the city’s theater district, GM’s Renaissance Center and the Cobo Conference Center. We also look forward to working with JACK Entertainment and VICI to ensure a seamless transition for all of our constituents including customers, employees, vendors, local government and Michigan regulators.
Greektown is one of three casinos in Detroit, along with MotorCity Casino and MGM Grand Detroit. Caesars Windsor is also just a couple miles away across the Detroit River.
Matt Cullen, Chief Executive Officer of JACK Entertainment, commented:
We purchased Greektown Casino-Hotel as a part of our overall economic development strategy in Detroit. After investing hundreds of millions of dollars of capital into redesigning and remodeling the property, as well as working with our outstanding team members and their unions to dramatically improve operations and customer service levels, Greektown Casino-Hotel is positioned for further future success. We are confident that Penn National is the ideal steward to take Greektown to the next level of growth. We chose to sell to Penn National, in large part, due to its strong culture and the quality of its leadership and team. They are a professional operator that Greektown team members will enjoy working with as they continue to deliver excellent service to our guests.
With the acquisition, Penn National will operate 41 casinos in 19 states, including the Hollywood Casino, L’Auberge, Argosy, Boomtown Casino, and Ameristar chains, along with Tropicana Las Vegas and the M Resort.
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