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December 2, 2022 Casino, Land Based, Finance

Wynn Resorts completes $1.7bn Encore Boston Harbor leaseback sale

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Wynn will continue to operate the casino via its triple net lease arrangement with Realty Income.

Wynn Resorts has announced the completion of the sale of real estate assets of Encore Boston Harbor to Realty Income Corporation for $1.7bn. This represents a cash cap rate of 5.9% once the deal has received all necessary regulatory approval from the state of Massachusetts.

The net proceeds of this transaction will strengthen Wynn’s global liquidity position to $4.4bn.

Wynn Resorts first announced this deal in February, saying that the deal would take the form of a long-term lease. The lease will have an annual rent of $100m and a 30-year run, with a one-year tenant renewal option.

The rent will escalate annually at a rate of 1.75% for the first 10 years. Then it will increase at a greater rate than 1.75% or the consumer price index (capped at 2.5%) over the course of the remaining initial lease term.

Wynn Resorts will continue to operate the Encore Boston Harbor integrated resort at a five-star standard via its triple net lease arrangement with Realty Income.

It will also retain its 13-acre land assemblage on the east side of Broadway in Everett, Massachusetts. On this land, the company intends to construct an expansion that is expected to include additional covered parking, as well as other non-gaming amenities.

Encore Boston Harbor is a luxury casino resort destination featuring a 211,000-square-foot casino, 671 hotel rooms, a spa, specialty retail outlets, 16 dining and lounge venues, and approximately 71,000 square feet of ballroom and meeting spaces.

The casino is the largest private, single-phase development in the history of the Commonwealth of Massachusetts.

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