GLPI Pens $225 Million Financing Deal for Caesars Republic Sonoma County

Written by

Share on social media

Gaming and Leisure Properties (GLPI) has agreed to serve as the lead real estate financing partner for the new Caesars Republic Sonoma County in California.

Under the agreement, GLPI will commit $225 million in financing. The project will see the new integrated resort developed on the site of the current River Rock Casino.

GLPI will initially act as a lender to the project. This will include a delayed draw term loan of $180 million, priced at a fixed rate of 12.50%, and a term loan B of $45 million, with current yield to maturity of 13.95%.

Upon, or prior to, maturity of the six-year term loans, the Dry Creek Rancheria Band of Pomo Indians – working with Caesars on the development – will lease the property to an affiliate of GLPI for a 45-year term. This will be done for no less than $112.5 million, with GLPI sub-leasing the property back to an affiliate of Dry Creek.

It was also agreed that the annual rent on the sublease will be based on a cap rate of 9.75%.

Sonoma County Project a ‘Unique Opportunity for GLPI

Caesars and Dry Creek Rancheria broke ground on the new resort near Healdsburg, California, in August.

Once completed, the resort will feature a casino with 1,000 slot machines and 28 table games. Other on-site amenities will include a 100-room hotel, four restaurants, three bars, a luxury spa, pool and fitness center.

The existing casino will remain open during construction, with the completion expected in the summer of 2027.

GLPI Chairman and CEO Peter Carlino said the partnership would build on GLPI’s existing relationship with Caesars and present the group with new opportunities.

“Through this project, we are also extending our long-term partnership with Caesars Entertainment, which reflects our corporate focus on working collaboratively with the industry’s best gaming operators, to enable them to achieve their growth and development goals,” Carlino said.

“This valuable partnership also validates other aspects of our growth strategy, importantly, our belief and commitment to pursuing long-term tribal casino financing and new market opportunities.

“Finally, it provides GLPI with a unique opportunity to expand our presence in the California market, in a prime location.”