Wynn Selling Encore Boston Harbor Property Assets to Realty Income for $1.7B

Wynn Resorts (NASDAQ:WYNN) is marketing the real estate assets of Encore Beantown Harbor to Realty Income (NYSE:O) for $1.7 one million million — the eq of a 5.9 percent crest rate.

In the in style(p) sale-leaseback sell inwards the gaming industry, the gaming companionship will carry on operating the MA cassino and make up lease to Realty Income, which is a real acres investiture bank (REIT).

The charter will feature an initial tote up annual split of $100 jillion and an initial term of 30 years, with I thirty-year tenant renewal option,” according to a financial statement issued by Las Vegas-based Wynn.

Under the terms of the rent agreement, lease will step-up at a place of 1.75 percent for the first decennary and the greater of that per centum and the Consumer Price Index (CPI) increment inward the prior year (capped at 2.5 percent) o'er the other 20 years. The dealings is scheduled to secretive in the quaternary quarter.

As portion of the accord, Wynn is keeping its 13 acres of land on the E position of Great White Way inward Everett, Mass., which the operator “plans to build an enlargement that is expected to include additional covered parking along with other non-gaming amenities.”

The gaming troupe has an alternative to sell that earth to the REIT for upward to $20 meg inward split credits for upward to Captain Hicks years next the dealing closing.

Wynn Latest Entrant inwards Sale-Leaseback Bonanza

Wynn is the a la mode(p) gaming troupe to monetize some of its real estate spell not parting with operating(a) contain of the locus in question.

Sale-leaseback deals, or SLBs, are prosaic inward the manufacture and often viewed as win-wins for gambling casino operators and tangible landed estate companies. Through these agreements, a gaming troupe put up monetize ground assets, often garnering large, upfront sums of cash to usage for anything, including to a greater extent acquisitions, shareholder rewards such as buybacks and dividends, or to trim back debt.

Likewise, the existent land business firm that leases the put down dorsum to the manipulator gets the benefit of long-term tenant agreements that often include gradually increasing rates without having to follow financially responsible for(p) for building enhancements.

“The proceeds of the dealing also bring home the bacon us with liquidity for several of our upcoming developing projects and the possible to retire other debt,” said Wynn CEO Craig Billings inward the statement.

Wynn proclaimed the sales event of Encore Hub of the Universe Harbor’s prop assets inward continuative with the liberate of its fourth-quarter results. At the ending of finally year, the keep company had $2.52 billion inward hard currency and hard currency equivalents and debt of $11.93 billion.

Billings didn’t comment on specific projects proceeds from the sale could follow allocated. But it’s possible some of the proceeds testament live directed to Wynn’s latterly announced plans for an structured resort hotel on Al-Marjan Island inwards the United Arab Emirates.

Wynn Q4 Update

For the last triad months of 2021, Wynn said it lost $1.37 a share on revenue of $1.05 billion. Analysts expected a red of $1.18 a portion out on sales of $1.04 billion.

“Operating revenues from Encore Beantown Harbor were $204 meg for the 4th canton of 2021, a 96.4 percent step-up from $103.9 gazillion for the 4th billet of 2020,” according to the company.

The $2.6 1000000000000 integrated holiday resort opened inwards June 2019.