Realty Income Corporation announced that the company has signed a definitive agreement to acquire the Encore Boston Harbor (Encore) Resort and Casino for $1.7 billion under a long-term net lease agreement with Wynn Resorts, Limited. The transaction is Realty Income's first acquisition in the gaming industry. The sale-leaseback transaction with Wynn Resorts is expected to be executed at a 5.9% initial cap rate, includes an initial lease term of 30 years with annual rent growth of 1.75% for the first ten years and the greater of 1.75% or CPI (capped at 2.5%) over the remaining lease term.
The lease also includes an additional 30-year option to renew upon expiration. Pending regulatory procedures, the company expects to close this transaction in the 4th quarter of 2022.