Gaming and Leisure Properties Inc. (GLPI) announced the acquisition of Sunland Park Racetrack and Casino in southern New Mexico for $183.75 million, with an initial capitalization rate of 8.2%, expected to be completed by October 15, 2025. After the acquisition, the property will be included in GLPI's strategic gaming lease agreement, with an annual rent of $15 million, a lease term of 25 years with options to renew. This acquisition will expand GLPI's property portfolio to 69 locations across the United States and deepen its partnership with operator Strategic Gaming.
Transaction Details and Financial Terms
GLPI acquires Sunland Park Racetrack and Casino for $183.75 million, with an initial capitalization rate of 8.2%. The acquisition is planned to be completed by October 15, 2025, at which time the property will be incorporated into GLPI's strategic gaming lease agreement system.
According to the lease agreement, the annual rent is set at $15 million, increasing by 2% each year. The lease term is 25 years, including two 10-year renewal options. GLPI states that this acquisition is expected to enhance its Adjusted Funds From Operations (AFFO) performance.
Property Overview and Facilities
Sunland Park opened in 1959, covering 157 acres near the Texas border. The property includes a 25,000 square foot gaming hall, equipped with 738 slot machines and 12 electronic gaming tables. The racetrack facilities include a one-mile long racetrack, accommodating 733 spectators.
The property also has a banquet hall for 600 people, a betting area for horse racing, and a hotel with 78 rooms, providing 1,300 parking spaces. The property includes undeveloped land, offering possibilities for future expansion.
Geographic Location and Market Potential
Sunland Park is located in the Borderplex region, covering El Paso, Texas, and Las Cruces, New Mexico, serving about 2 million adult population. The median household income in the region has been continuously rising, exceeding the national average growth rate over the past five years.
Analysts point out that the region's stable population structure and limited market competition provide favorable conditions for the property's long-term stable operation. Undeveloped land offers additional potential for future growth.
Strategic Cooperation and Operational Arrangements
This acquisition strengthens the partnership between GLPI and Strategic Gaming Management. Strategic Gaming, founded by CEO J. Grant Lincoln in 2009, operates several casinos in the United States.
According to the lease agreement, Strategic Gaming will continue to operate Sunland Park, while GLPI holds the real estate ownership. This is the fourth property Strategic Gaming leases from GLPI, with previous collaborations including casino projects in Nevada and South Dakota.
Regulatory Environment and Market Competition
New Mexico's gaming regulatory environment is stable, with limited licensing, and strict restrictions on the distribution of gaming venues. Regulations prohibit the opening of new private casinos within an 80-mile radius of existing racetrack casinos, effectively protecting Sunland Park's market position.
The state currently has 21 tribal casinos and 5 commercial casinos. Sunland Park's nearest competitor is Speaking Rock Casino, 20 miles away, with the nearest potential commercial competitor about 550 miles away.
Market Performance and Industry Trends
New Mexico's non-tribal casino annual revenue is stable, with annual revenue exceeding $225 million, except for a dip in 2020 due to the pandemic. In 2023, revenue reached a peak of $271 million, and $261 million in 2024, the third highest in history.
Racetrack casinos have historically performed well in the state, with a stable regulatory environment and limited competition providing operational security. Population growth and income increases in the border region support future development.
Corporate Strategy and Portfolio
This acquisition increases GLPI's properties in New Mexico to two, having previously acquired Zia Park Casino Hotel in Hobbs. The total number of properties in the United States reaches 69, continuing the strategy of acquiring assets in underserved but potential growth areas.
GLPI's Chairman and CEO Peter Carlino stated that the acquisition aligns with the company's asset diversification strategy, supports tenant growth plans, and consolidates the company's reputation as the preferred gaming real estate owner.
Transaction Advisors and Market Evaluation
Truist Securities served as GLPI's financial advisor, with CBRE Investment Banking and Macquarie providing consulting for the seller. Analysts believe the transaction is consistent with GLPI's consistent strategy, targeting regions with strong demographic structures and limited competition.
Truist Securities analyst Barry Jonas noted that the region's 2 million adult population and continuously rising income levels, combined with a limited competitive environment, provide long-term stability for the investment.
