Wynn Resorts sells Boston property to Realty Income for US$1.7b

[LOS ANGELES] Wynn Resorts agreed to sell the land and buildings associated with its Encore Boston Harbor resort for US$1.7 billion to Realty Income.

Wynn will continue to manage the property, paying the San Diego-based real estate investment trust (Reit) rent that begins at US$100 million annually. The Las Vegas-based casino giant is keeping 13 acres (5.25ha) of adjacent land that it will use to build a parking garage and other non-casino amenities. Wynn has an option to sell that land to Realty Income for an additional US$20 million a year in rent.

The transaction is expected to close in the fourth quarter, Wynn said in a statement.

The casino industry has increasingly turned to Reits for financing as a way to reduce debt and free up capital for expansion. Some of the most famous casinos in Las Vegas are now owned by Reits, including the Bellagio and Caesars Palace. Wynn isn't pursuing a similar transaction for its Las Vegas property, according to a memo to employees from chief executive officer Craig Billings.

Wynn won the right to the Boston area's sole casino after an extensive bidding process with the state. The Encore opened in 2019 at a cost of US$2.6 billion but got off to a slow start, with results hampered further by the global pandemic.

Wynn disclosed the sale as it announced fourth-quarter results that were in large line with estimates on sales and earnings before interest, taxes, depreciation and amortisation. BLOOMBERG