One of Canada’s largest and most diversified casino operator Gateway Casinos & Entertainment Limited (“Gateway”) officially announced that it inked a sale-lease-back agreement for up to three Vancouver properties worth over C$500 million with American investors. Under the “Sale-Leaseback” agreement, Mesirow Realty Sale-Leaseback will be the new landlord of the three Vancouver-based properties, including the Grand Villa Casino Burnaby, Starlight Casino New Westminster, and Cascades Casino Langley. Gateway expects to collect C$483 million from net proceeds.
Rumours about Gateway selling three of its Vancouver-area casinos in a sale/ leaseback transaction to foreign investors have been a constant last year. In June 2017, Gateway Executive Chairman Gabriel de Alba told interviewers from Reuters that the company may sign a sale-lease-back agreement with international developers by the third quarter of 2017. Gateway’s official did not provide any specific details regarding the names of the interested parties, but the information was enough to give rise to a number of speculations.
In December last year, Gateway entered into the sale/ leaseback agreement but it was pending regulatory approvals from the British Columbia regulators. According to the latest updates, the two parties received the go-ahead to seal the deal. The Sale-Leaseback transaction is expected to close by the end of March after meeting certain customary closing conditions and arranging the final documentation.
Under the lease, Gateway will continue to operate the casinos. The company detailed that there are no planned changes to employees or operations at these locations. It is interesting to mention that Gateway’s portfolio includes licenses for undeveloped land with no facilities. The total value of its real estate portfolio outside the three Vancouver sites amounts to over C$200 million. Gateway significantly expanded its footprint on the casino gambling market in Canada through a number of acquisition deals.
Gateway Continues to Expand on the Gambling Market
In 2010, Toronto-based private equity firm The Catalyst Capital Group Inc. bought Gateway Casinos, helping it to climb out of the financial hole and reduce its net debt by about C$1 billion. The Catalyst Capital Group managed to successfully rebuild and restructure the company. Eventually, the company managed to launch an initial public offering (IPO) that would raise funds to enhance the company’s persistent growth on the market.
The Burnaby-headquartered Gateway currently operates a number of properties across Canada. Gateway has managed to become Canada’s largest gaming company with Ontario expansion. Currently, Gateway has several projects in its cards, including a rebranding and renovation of the Palace Casino at the West Edmonton Mall, Chances Playtime Campbell River and Point Edward casino. In addition to that, the company plans to build a C$70 million entertainment complex in Delta.