Acquisitions

12 Months Ended

Dec. 31, 2021

The Company accounts for its acquisitions of real estate assets as asset acquisitions under ASC 805 - Business Combinations. Under asset acquisition accounting, transaction costs incurred to acquire the purchased assets are also included as part of the asset cost.

Current year acquisitions

As described in Note 1, the Company acquired the real property assets of Live! Casino & Hotel Maryland, on December 29, 2021. The purchase price allocation of these assets and liabilities based on their fair values at the acquisition date are summarized below (in thousands)


Investment in leases, financing receivables	$	1,213,896
Lease Liabilities	(53,309)
Total Purchase Price	$	1,160,587

The table above excludes the reserve for financing receivables of $12.2 million that was recorded through the Consolidated Statement of Operations for the year ended December 31, 2021.

As previously discussed in Note 1, on June 3, 2021, the Company completed its previously announced transaction with Bally's in which the real estate assets of Tropicana Evansville and Dover Downs Hotel & Casino were acquired. The final purchase price allocation of these assets based on their fair values at the acquisition date are summarized below (in thousands).



Land and improvements	$	219,579
Building and improvements	201,430
Real estate investments, net	421,009
Right-of-use assets and land rights, net	101,813
Lease liabilities	(35,372)
Total purchase price	$	487,450

Pending acquisitions

As discussed in Note 1, the Company anticipates closing of the acquisition of the assets comprising the Pennsylvania Live! Master Lease from Cordish in early 2022 subject to the receipt of regulatory approvals and other customary closing conditions. Total consideration of approximately $674 million will consist of 3.0 million OP Units and cash. Annual rent under the Pennsylvania Live! Master Lease will be $50 million and will have a 1.75% fixed yearly escalator on the entirety of rent commencing on the leases' second anniversary.

On April 13, 2021, the Company announced that it had entered into a binding term sheet with Bally's to acquire the real estate of Bally’s casino property in Black Hawk, CO and its recently acquired property in Rock Island, IL, in a transaction that is subject to regulatory approval. Total consideration for the acquisition is $150.0 million and the parties expect to add the properties to the Bally's Master Lease for incremental rent of $12 million. This transaction is expected to close in the second half of 2022.

In addition, Bally’s has granted GLPI a right of first refusal to fund the real property acquisition or development project costs associated with any and all potential future transactions in Michigan, Maryland, New York and Virginia through one or more sale-leaseback or similar transactions for a term of 7 years.

On April 13, 2021, Bally’s also agreed to acquire both GLPI’s non-land real estate assets and Penn's outstanding equity interests in Tropicana Las Vegas Hotel and Casino, Inc. for an aggregate cash acquisition price of $150 million. GLPI would retain ownership of the land and will concurrently enter into a ground lease for 50 years with initial annual rent of $10.5 million The ground lease will be supported by a Bally’s corporate guarantee and cross-defaulted with the Bally's Master Lease. This transaction is expected to close in the second half of 2022.

Both GLPI and Bally’s have committed to a structure in which GLPI has the potential to acquire additional assets in sale-leaseback transactions to the extent Bally’s elects to utilize GLPI’s capital as a funding source for its proposed acquisition of Gamesys Group plc ("Gamesys"). The $500 million commitment provides Bally’s alternative financing which, in GLPI’s sole discretion, may be funded in the form of equity, additional prepaid sale-leaseback transactions or secured loans. However, on July 26, 2021, Bally's announced that as a result of better than expected operating performance at its land-based retail casinos and interactive businesses, it does not plan to draw on this commitment to fund the Gamesys acquisition.

Prior year acquisitions

As previously discussed in Note 1, the impact of COVID-19 resulted in casino-wide closures by all of our tenants. As a result of COVID-19, on April 16, 2020, the Company and certain of its subsidiaries acquired the real property associated with the Tropicana Las Vegas from Penn in exchange for $307.5 million of rent credits, which were fully utilized in 2020 for rent due under the parties' existing leases.

The Company recorded an initial land and building value of $226.2 million and $81.3 million, respectively. During the year ended December 31, 2020 depreciation expense of $2.7 million was recorded. Additionally, deferred rent of $307.5 million was recorded at the acquisition date, which was fully recognized for the year ended December 31, 2020.

The Tropicana Las Vegas assets are summarized below.


	December 31, 2020
	(in thousands)
Land and improvements	$	226,160
Building and improvements	81,340
Total real estate of Tropicana Las Vegas	307,500
Less accumulated depreciation	(2,669)
Real estate of Tropicana Las Vegas , net	$	304,831

On October 1, 2020, the Company and Penn closed on their previously announced transaction whereby GLPI acquired the land under Penn's gaming facility under construction in Morgantown, Pennsylvania in exchange for $30.0 million in rent credits which were fully utilized by Penn in the fourth quarter of 2020. The Company is leasing the land back to an affiliate of Penn pursuant to the Morgantown Lease for an initial annual rent of $3.0 million, subject to escalation provisions following the opening of the property.

On October 27, 2020, the Company entered into an Exchange Agreement with subsidiaries of Caesars that own, respectively, Waterloo and Bettendorf. Pursuant to the terms of the agreement, Caesars transferred to the Company the real estate assets of the Waterloo and Bettendorf properties in exchange for the transfer by the Company to Caesars of the real property assets of the Tropicana Evansville, plus a cash payment of $5.7 million. The exchange transaction closed on December 18, 2020, which resulted in the Waterloo and Bettendorf facilities being added to the Amended and Restated Caesars Master Lease and the rent increased by $0.5 million annually. The Company recorded a non-cash gain of $41.4 million in the fourth quarter of 2020 related to the transaction, which represented the difference between the fair value of the properties received compared to the carrying value of Tropicana Evansville and the cash payment of $5.7 million. The following table summarizes the fair value of the assets acquired in the Exchange Agreement and the carrying value of the Tropicana Evansville assets that were transferred to Caesars. (in thousands):


	Bettendorf		Waterloo		Total
Land	$	29,636	$	64,262	$	93,898
Building and improvements	85,150		77,958		163,108
Total real estate investments	$	114,786	$	142,220	$	257,006
Less: Evansville Land and improvements					(47,439)
Less: Evansville Buildings and improvements, net					(136,858)
Less: Evansville Right of use assets and land rights, net					(55,456)
Add: Evansville, Operating Lease Liabilities					29,795