The growth of the gaming industry often depends on developers’ ability to ink the best real estate deals and financing options to balance risks with potential rewards. The $1.4 billion Live! Casino & Hotel Virginia project in Petersburg is another clear example of the theory. 

$27M in Land, $440M in Hard Cost Financing

Gaming and Leisure Properties (GLPI) is central to the development, handling land acquisition and funding for hard costs. The project plans to open a temporary casino as early as late 2026, with a permanent facility following in late 2027, showing how GLPI uses real estate to support operators while delivering returns for its shareholders.

The $600 million casino located off I-95 has a dedicated site spreading across 98 acres. It will serve as the centerpiece of a complex $1.4 billion planned development that will feature hotels, shops, restaurants, entertainment areas, and residential features.

GLPI’s role in Live! Virginia focuses on two main parts: a $27 million land purchase and $440 million in hard cost financing, both at an 8.0% cap rate. 

According to StockTITAN, this structure is expected to add to GLPI’s Adjusted Funds From Operations (AFFO). The company’s use of triple-net leases, where tenants like The Cordish Companies and Bruce Smith Enterprise cover operating expenses, taxes, and insurance, is key to this approach. 

The land funding is set for Q1 2026, while the $440 million in hard cost draws will be staged between late 2026 and early 2028, aligning with the project’s phased development.

A notable feature is the rent escalation plan. During construction, Cordish will pay rent on GLPI’s funding, with annual increases of 1.75% starting one year after the permanent casino opens. 

This setup will provide immediate cash flow while building long-term revenue, illustrating GLPI’s real estate strategy, according to StockTITAN.

This approach reflects GLPI’s broader strategy of buying high-quality gaming properties at attractive cap rates. For example, its $183.75 million acquisition of Sunland Park Racetrack & Casino in New Mexico used an 8.2% cap rate and a triple-net lease with a 2.0% annual rent increase, slightly lower than the Live! Virginia deal but still solid, according to GamingIntelligence.

Looking Ahead

Despite the positive outlook, risks remain. For starters, GLPI carries significant leverage, which means rising borrowing costs could pressure margins. The rate of success is also tied to upcoming regulatory approvals and tenant performance. 

Bally’s, which is GLPI’s most important tenant, is currently dealing with debt restructuring, once again showing the interconnected risks in gaming REITs. Nonetheless, analysts remain cautiously positive, with Barclays upgrading GLPI to Overweight in October, citing strong prospects for Bally’s and GLPI’s strategic acquisitions.

In September, GLPI agreed to a $735 million sale-leaseback with Bally’s for the Twin River Lincoln Casino Resort in Lincoln, Rhode Island. 

That deal is currently on hold due to claims from a group of the seller’s creditors. Despite this, GLPI continues to follow its strategy of acquiring casino properties in smaller, more stable markets.