In a news release, MGM Growth Properties said it plans to fund the purchase through a combination of cash on hand and debt. Ultimately, the company plans to sell the entities holding the licenses and operating assets to a third-party operator. The company, meanwhile, plans to retain ownership of the real estate, which it expects will generate $50 million to $60 million in annual rent.
MGM's purchase agreement is with Milstein Entertainment. It will be for 100% of the issued and outstanding limited liability company interests in Northfield Park Associates LLC, which owns and operates the Rocksino. The deal is expected to close in the second half of the year.
"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, CEO of MGM Growth Properties, in a news release. "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 sits 16 miles southeast of downtown Cleveland and 18 miles north of Akron along Interstate 271. The 110-acre property includes a 200,000-square-foot gaming facility, 1,900-seat music venue and 250-seat event space. It also includes a year-round horse racetrack, gas station and car wash.