LAS VEGAS (AP) — Some casino companies beset by weighty debt and limited financing options are separating their gambling operations from their brick and mortar properties to generate cash. A deal between two companies is the latest example of using real estate investment trusts as an option free of a corporate income tax.
Las Vegas-based Pinnacle Entertainment announced this week it would sell its casino-hotels to existing real estate investment trust Pennsylvania-based Gaming and Leisure Properties Inc. in an all-stock deal valued at $4.7 billion and lease them back annually starting at $377 million making Pinnacle a renter and Gaming and Leisure its landlord.
Analysts say the structure isn't for everyone and is time intensive and complex. But for some it frees up cash and makes future financing more flexible.