Gaming and Leisure Properties revenue surges to $359.6 million in Q3 2023
Gaming and Leisure Properties (GLPI) released its third-quarter results for 2023, ending on September 30. The gaming and leisure real estate giant made headlines with an impressive US$ 359.6 million in total revenue during the third quarter, marking an increase of more than US $25 million compared to the same period last year.
Recordbreaking results
During the third quarter, GLPI’s net income from operations soared to an impressive US $268.3 million, contributing to an overall third-quarter net income of US $189.3 million. Furthermore, the company’s adjusted EBITDA saw remarkable growth, surging by nearly $20 million to reach an outstanding US $327.1 million.
CEO comments
GLPI’s Chairman and CEO, Peter Carlino, attributes this remarkable growth to the company’s strategic approach and real estate expansion in the previous year. He highlighted the significance of partnering with the industry’s leading operators, supporting their ongoing and future endeavours, and diversifying their tenant portfolio.
Carlino commented, “The merits of our strategy to work with the industry’s leading operators and support their current and future initiatives, while expanding and diversifying our tenant roster in an accretive manner, was evident again in our record third-quarter results.”
In the third quarter of 2023, Gaming and Leisure Properties (GLPI) reported significant year-on-year growth in its financial performance, with total revenue reaching $359.6 million, reflecting a robust 7.7% increase compared to the same period in 2022. Additionally, GLPI’s income from operations increased to $268.3 million, showing a 15.5% rise, while net income surged by 16.3% to reach $189.3 million in Q3 2023. Furthermore, GLPI’s adjusted EBITDA exhibited positive growth, with a 5.9% increase, reaching $327.1 million in the third quarter of 2023 compared to the previous year. (Source: SiGMA)
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Expanding Real Estate Portfolio
In recent months, Gaming and Leisure Properties (GLPI) has been making strategic moves and investments that are poised to reshape the landscape of the gaming and leisure industry. In early September 2023, GLPI acquired the land and select improvements at Casino Queen Marquette for US $32.72 million. This acquisition resulted in a substantial annual rent increase of US $2.7 million on the Casino Queen Master Lease. Furthermore, GLPI is gearing up to invest up to $12.5 million in specific construction costs for a landside development project at Casino Queen Marquette, slated for completion by December 31, 2024.
During the same month, the company raised net proceeds of US $210.8 million by selling 4.4 million shares through a sales agent using at-the-market offerings.
In late August 2023, GLPI made another noteworthy move by acquiring the land associated with the Hard Rock Casino development project in Rockford, IL, for US $100 million. Simultaneously, GLPI entered into a 99-year ground lease with 815 Entertainment, further bolstering its presence in the gaming industry. This lease involves an initial annual rent of US $8 million, with a fixed 2 percent annual escalation starting in the lease’s second year and continuing throughout its term.
Apart from the ground lease, GLPI is also committed to providing up to US$ 150 million in development funding for the Rockford project, with US $40 million already funded as of September 30, 2023. The Rockford Loan, which facilitates this funding, carries a 10 percent interest rate and has a draw period of up to one year, extendable for up to six years. Importantly, this loan can be prepaid without penalty following the expected opening of the Hard Rock Casino in September 2024. The company also secured a right of first refusal on the building improvements of the casino, further enhancing its investment’s potential.
Casino Queen Baton Rouge Success
In August GLPI’s landside development project at Casino Queen Baton Rouge officially opened its doors to the public. The Casino Queen Master Lease was adjusted to reflect a yield of 8.25 percent based on GLPI’s project costs of US $77 million, demonstrating the profitability of their strategic ventures.
A Game-Changing Stadium Development
In May GLPI entered into a binding letter of intent (LOI) with Tropicana Las Vegas, Inc., Bally’s Corporation, and Athletics Holdings LLC. The LOI outlines plans for developing a stadium that would serve as the home venue for the Major League Baseball (MLB) team currently known as the Oakland Athletics. The stadium is expected to complement a resort redevelopment project on GLPI’s 35-acre property in Clark County, Nevada. As part of the agreement, Athletics will be granted fee ownership by GLPI of approximately 9 acres of the Tropicana Site for stadium construction.
GLPI has committed to providing up to US $175 million in funding for hard construction costs, including demolition, site preparation, and the creation of essential public spaces for stadium utilization. Rent during the development period will be due at 8.5 percent of the funded amount, with certain provisions to accommodate additional funding under specific circumstances.
The completion of this transaction is subject to various approvals, including consent from MLB owners to relocate the Team on or before December 1, 2023, as well as regulatory approvals from the Nevada Gaming Control Board and Nevada Gaming Commission.
These strategic moves and investments indicate GLPI’s commitment to reshaping the gaming and leisure industry, promising exciting developments in the near future.
Sustainable Growth Outlook
GLPI’s success does not appear to be a one-off occurrence. Carlino is confident that the company can maintain this positive trend moving forward. He expressed his optimism for the future, saying, “With our opportunistic approach to portfolio expansion, the proven long-term resiliency of our tenants’ revenue streams, and comfortable rent coverage ratios across our portfolio, we expect to continue to deliver strong capital returns and yields for our shareholders.”
As GLPI continues to achieve record-breaking revenue and stable growth, the gaming and leisure properties market anticipates exciting developments in the months and years ahead.
