With operators across the industry reporting double-digit year-on-year losses due to the coronavirus shutdown, Pennsylvania-based real estate investment trust Gaming and Leisure Properties, Inc. has bucked the trend through a series of proactive moves, the latest being the purchase of the Las Vegas Tropicana property from Penn National Gaming, the operator from which GLPI was spun off in 2013, forming the first of the gaming REITs.
In addition to the Tropicana purchase, GLPI acquired Penn’s Morgantown, Pennsylvania mini-casino development in exchange for an aggregate non-cash rent payment of $337.5 million. The parties will enter into a lease for the Morgantown land which will generate $3 million of initial annual cash rent for GLPI.
In addition, Penn National has agreed to engage in an early renewal for both its master leases with GLPI, which extends their current terms by five years, giving GLPI shareholders enhanced visibility of future cash flows.
As a result of all these moves, GLPI reported first-quarter 2020 revenues of $283 million, only slightly below Wall Street estimates reported a key cash flow measure that topped Wall Street forecasts and revenue that met them and finished roughly even with a year earlier.
GLPI reported adjusted funds from operation, a cash flow measure excluding nonrecurring costs, of $188.8 million, or 88 cents per share, for the three months ended March 31, up from $183 million, or 85 cents per share, a year earlier. Adjusted earnings before interest, taxes, depreciation, and amortization, another cash flow measure that excludes one-time costs, were basically flat, rising 0.2 percent to $258.8 million from $258.4 million.
“This outcome accomplished our original goal of giving us and our lenders and our shareholders’ visibility and predictability around Penn’s rent payments through the end of this year,” Carlino said in a conference call with analysts. “It also ensured that our shareholders were made economically whole, which is a huge focus of ours in beginning.”
