DETROIT – Billionaire businessman Dan Gilbert is selling his Greektown Casino-Hotel in Detroit for $1 billion in cash.
Gilbert's Jack Entertainment, which acquired the casino in 2013, has reached a sale agreement with Penn National Gaming and VICI Properties Inc. Both are casino and gaming-related companies. Penn National already operates 40 such facilities in 18 different jurisdictions. It has a focus on slot machine entertainment.
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Penn National will enter into a triple net lease agreement with VICI Properties Inc. for the facility in Detroit's Greektown neighborhood. The lease will have an initial annual rent of approximately $55.6 million and an initial term of 15 years, with four 5-year renewal options, according to a news release.
Penn National will acquire the operating assets of Greektown for approximately $300 million, and VICI Properties will acquire the land and real estate assets of Greektown, for approximately $700 million. In a statement from Jack Entertainment, Gilbert said his companies will use the money for investment in Detroit real estate and business development.
“Our purchase of Greektown Casino-Hotel five and a half years ago, soon after its bankruptcy, allowed us to work with the great team at the property to create a winning culture and a vibrant business,” said Gilbert. "The sale to Penn National and VICI Properties will allow that strong trajectory to continue and provide additional capital to continue our strategic investments in our Detroit real estate and business initiatives."
The sale is expected to be completed by the middle of 2019. It will need approval by the Michigan Gaming Control Board.
Greektown Casino-Hotel first opened in 2000. It features 100,000 square feet of casino space, approximately 2,700 gaming machines and 60 table games, a poker room, three restaurants, seven fast casual food outlets, four bars and a coffee shop. In addition, the casino boasts a AAA Four Diamond 400-room, luxury high-rise hotel with 14,000 square feet of event and catering space. The property employs approximately 1,700 team members and has partnered with nearly 20 local restaurants to offer fine dining rewards to guests.
Gilbert's Jack Entertainment, meanwhile, still owns and operates gaming properties in Cleveland, Cincinnati and Detroit and racing facilities in Ohio and Kentucky.