Resort facilities

Penn Entertainment to move Illinois river casinos to land-based facilities and open new hotels

Penn Entertainment Inc. PENN,
-3.62%
said Monday that it plans to move riverside casinos in Aurora and Joliet, Illinois, to land-based facilities and build a new hotel in Hollywood Columbus, Ohio, and a second hotel tower in M Resort in Henderson, Nevada. Chief Executive Jay Snowden said he expects the properties to generate strong free cash flow returns, cementing his casino properties at the heart of his omnichannel approach to entertainment. Penn has also entered into an agreement with Gaming & Leisure Properties Inc. GLPI,
-1.36%
to create a new master lease that would include the two new facilities in Aurora and Joliet, as well as Hollywood Columbus (OH), Hollywood Toledo (OH), the M Resort (NV), the Meadows (PA) and Hollywood Perryville (MD). Gaming and Leisure will provide up to $225 million at a cap rate of 7.75% for the Aurora project. Penn may elect to receive up to $350 million in funding from Gaming & Leisure for property improvements. That brings the total to $575 million out of a total budget of about $850 million, Snowden said. Penn shares were down 0.9% premarket and down 41% year-to-date, while the S&P 500 SPX,
-0.72%
fell 24%.