MGM Growth Properties LLC (MGP) has announced an agreement with Milstein Entertainment LLC, for the $1.06bn acquisition of the Hard Rock Rocksino Northfield Park.
Intending to sell the entities holding the licenses and operating assets to a third party operator, MGP states an intention to retain ownership of the retail estate with an expected $50m-$60m annually in rent.
The membership interest purchase agreement is for “100% of the issued and outstanding limited liability company interests in Northfield Park Associates LLC,” the operators of the Rocksino.
MGP, an arm of MGM Resorts International, also stated plans to fund the purchase with a combination of “cash on hand and debt.”
James Stewart, Chief Executive Officer of MGM Growth Properties, explained: “MGP is proud to announce the acquisition of the Hard Rock Rocksino, the best performing gaming asset in Ohio.
“We are thrilled to join the Northeast Ohio community and look forward to continuing to work with the management team to consummate the transaction and identify a third-party tenant to operate the asset going forward.
“This attractive addition to our portfolio is expected to result in mid to high single digit percentage accretion to AFFO per share, demonstrating again our commitment to generating value for our shareholders.
“This transaction represents another significant step in executing on our business plan to sustainably grow our AFFO per share while diversifying our high-quality asset and tenant base.”
The Rocksino, situated in the suburb of Northfield, Ohio, is a gaming, dining and entertainment facility, featuring a 200,000 square foot gaming space with in excess of 2,300 video lottery terminals.
In addition to this it also boasts a year round racetrack, 1,900 seat music venue, 250-seat event space and a number of retail, food and beverage outlets.
Brock Milstein, Chairman of the Board at Hard Rock Rocksino Northfield Park, added: “Since opening our doors in December 2013, the Hard Rock Rocksino has established itself as the premier gaming and entertainment destination in the market, thanks to our dedicated employees, partners and loyal guests.
“MGM Growth Properties has many options and opportunities to invest all over the country, so we are especially proud and grateful that they have chosen to make such a meaningful investment in Ohio.”
The transaction is subject to closing conditions and regulatory approval, and is expected to be finalised in the second half on this year.