MGM Growth Properties LLC has announced that it has entered into an agreement with Milstein Entertainment LLC to acquire the Hard Rock Rocksino Northfield Park for approximately $1.06 billion.
The membership interest purchase agreement will be for 100 per cent of the issued and outstanding limited liability company interests in Northfield Park Associates LLC, which owns and operates the ‘Rocksino.’
"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," said James Stewart, the chief executive officer of MGM Growth Properties. "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."
The Rocksino is a gaming, dining and entertainment facility located in Northfield, Ohio, a suburb approximately 17 miles southeast of downtown Cleveland and 18 miles north of Akron. The property, which sits on 110 acres, consists of the 200,000-square foot gaming facility, which features over 2,300 video lottery terminals, a variety of retail and food and beverage outlets, as well as entertainment venues, including a 1,900-seat music venue and a 250-seat event space. It also includes a year-round horse racetrack and a gas station and car wash.
"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," said Brock Milstein, chairman of the board at Hard Rock Rocksino Northfield Park. "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."
MGP plans to fund the purchase price with a combination of cash on hand and debt. MGP expects to ultimately sell the entities holding the licenses and operating assets to a third-party operator. MGP intends to retain ownership of the real estate, anticipating $50 to $60 million of annual rent, which is expected to represent approximately 1.8x rent coverage.
Concluded Stewart, "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 transaction is expected to close in the second half of 2018 and is subject to customary closing conditions and regulatory approvals.
(MGM Growth Properties)