Wynn Resorts (NASDAQ: WYNN) said Th it completed the previously announced sales agreement of Encore Bean Town Harbor’s tangible land to Realty Income (NYSE: O) for $1.7 billion.

The transaction, revealed inward February, is all cash and comes at a pileus value of 5.9%. It also marks Realty Income’s initial maraud into gaming tangible estate. Under the terms of the lease agreement, split testament growth at a place of 1.75% for the first of all decade, and the greater of that pct and the Consumer Leontyne Price Index (CPI) growth inward the prior year (capped at 2.5%) over the other 20 years. The dealing is scheduled to secretive inwards the 4th quarter.

The hire has an initial yearly rip of $100 million for a full term of 30 years, with one 30-year renewal option. The hire will escalate every year at a rate of 1.75% for the foremost 10 years and the greater of 1.75% or CPI (capped at 2.5%) over the remaining initial lease term,” according to a financial statement issued by Wynn.

The Las Vegas-based casino companion will go on operating the Boston-area integrated resort. As voice of the accord, Wynn is keeping its 13 acres of land on the east position of Great White Way inwards Everett, Mass., on which the manipulator “plans to construct an expanding upon that is expected to include additional covered parking along with other non-gaming amenities.” The gaming companion has the option to sell that shore to the REIT for upwards to $20 jillion in rent credits for upwards to half dozen years next the transaction closing.

Win-Win for Wynn and Realty Income

Wynn noted net proceeds from the trade will raise its liquidity position, which currently stands at $4.4 billion. That’s pivotal at a clip when operators with Macau exposure, of which Wynn is one, are allocating cap to those units to comply with the special administrative region’s (SAR) unexampled gaming laws.

Sale-leaseback deals, or SLBs, are humdrum inwards the industry and often viewed as win-wins for cassino operators and existent estate companies. Through these agreements, a gaming troupe can buoy monetize set down assets, often garnering large, upfront sums of hard currency to enjoyment for anything, including more acquisitions, shareholder rewards such as buybacks and dividends, or to thin debt.

For Realty Income, the real demesne investment trustingness (REIT) bolsters tenant diversity past acquiring Encore Boston Harbor. The REIT controls o'er 11,700 existent landed estate properties owned below long-term net rental agreements with commercial-grade clients, according to a statement.

It remains to live seen if Realty Income delves further into owning gaming tangible estate, but plentitude of operators are looking for to monetise belongings holdings, so it’s a possibility. Wynn maintains ownership of the dimension assets fastened to Wynn and Encore on the Las Vegas Strip.

Busy Clarence Shepard Day Jr. for Gaming Real Estate Deals

In addition to Realty Income and Wynn announcing the finalisation of the Encore Beantown Harbor transaction, Thursday brought to a greater extent gaming real landed estate news.

VICI Properties (NYSE: VICI) said earliest today it’s buying the 49.9% of the Mandalay Bay and MGM Grand on the Las Vegas Strip it didn’t antecedently own.

The REIT is paying $4.27 1000000000000 in immediate payment and debt to Blackstone Real Estate Income Trust (BREIT) for the 49.9% stake inwards those integrated resorts.

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