The real estate investment trust (REIT) established in 2016 by American casino giant MGM Resorts International has announced the signing of a deal that will see it spend $1.06 billion in order to purchase the Hard Rock Rocksino Northfield Park.
MGM Growth Properties LLC runs twelve venues on behalf of MGM Resorts International including The Mirage and Mandalay Bay in Las Vegas and revealed that the agreement with the current owner of the northern Ohio venue, Milstein Entertainment LLC, is expected to close during the second half of the year subject to its receipt of the necessary regulatory approvals.
Las Vegas-based MGM Growth Properties LLC, which also manages MGM Resorts International’s New York-New York, Luxor, Excalibur, Monte Carlo and The Park properties as well as its MGM Grand Detroit, Beau Rivage and Gold Strike Tunica, declared that it intends to fund its latest acquisition through the use of ready cash and its existing debt facilities. Following the completion of the deal, it stated that it anticipates retaining ownership and charging annual rent amounting to as much as $60 million.
James Stewart, Chief Executive Officer for MGM Growth Properties LLC, proclaimed that his firm was ‘thrilled to [be joining] the northeast Ohio community’ and anticipates ‘continuing to work with the management team to consummate the transaction and identify a third-party tenant to operate the asset going forward’.
“MGM Growth Properties LLC is proud to announce the acquisition of the Hard Rock Rocksino Northfield Park, the best performing gaming asset in Ohio,” read a Thursday statement from Stewart. “This attractive addition to our portfolio is expected to result in mid to high single-digit percentage accretion to adjusted funds from operations per share, demonstrating again our commitment to generating value for our shareholders.”
Located around 17 miles southeast of downtown Cleveland and currently operated by Hard Rock International, the Hard Rock Rocksino Northfield Park features an all-weather horseracing track as well as a 200,000 sq ft gaming floor offering in excess of 2,300 video lottery terminals. The 110-acre facility moreover includes a 1,900-seat concert venue, a car wash and gas station, a 250-seat events space and a variety of food, beverage and retail outlets.
“This transaction represents another significant step in executing on our business plan to sustainably grow our adjusted funds from operations per share while diversifying our high-quality asset and tenant base,” read the statement from Stewart.