Detroit’s Greektown Casino-Hotel became the 42nd property operated by Penn National Gaming Thursday.
Sale of the 19-year-old hotel-casino was officially closed by a joint venture involving Penn National and real estate investment trust VICI Properties for a combined $1 billion. Detroit becomes the 19th different jurisdiction where Penn National operates. The company is the nation’s largest regional casino operator.
Greektown was owned by businessman Dan Gilbert through his Detroit-based Jack Entertainment.
Michigan gaming regulators approved the transaction earlier this week.
Penn National CEO Tim Wilmott said the Michigan city was “one of the nation’s largest regional gaming markets” while Greektown was the “only casino in the heart of the revitalized downtown Detroit area.”
Penn paid $300 million to acquire the operations of Greektown. The company entered into a triple net lease agreement with VICI. The lease has an initial annual rent of approximately $55.6 million and an initial term of 15 years, with four 5-year renewal options.
VICI paid $700 million to acquire Greektown’s real estate. The transaction is the second for the company with Penn National. The companies closed on a similar purchase of the Margaritaville property in Bossier City, Louisiana last year.
VICI owns more than 20 properties associated with Caesars Entertainment.
“In the past five months we have closed on three large-scale acquisitions, deploying $1.0 billion in proceeds while adding approximately $100 million of annualized rent, and broadening our geographic diversity by expanding into two new jurisdictions,” VICI President John Payne said in a statement.
Greektown features a 100,000 square foot casino with 2,700 gaming machines and 60 table games, as well as a poker room. There are 400 hotel rooms and 14,000 square feet of event and catering space. Greektown has three restaurants, seven fast casual food outlets, four bars and a coffee shop. The property has partnered with nearly 20 local restaurants to offer fine dining rewards to guests.
The property employs 1,700 workers.
“We look forward to welcoming patrons from high profile 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,” Wilmott said.
He added that Greektown would be included when the company relaunches its enhanced player loyalty program this year.
Penn said it will include the Greektown results in the company’s Northeast reporting segment for financial reporting purposes.
The announcement took place after the markets closed. Penn ended Thursday at $20.83 on the Nasdaq, down 54 cents or 2.53 percent. VICI closed at $22.60 on the New York Stock Exchange, up 12 cents or 0.53 percent.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
