Bally’s executes sale-leaseback on newly acquired Freedom Center site, raising up to $500 million to develop Chicago casino – Chicago Tribune

Days after buying the 30-acre Freedom Center printing site, Bally’s has sold the land to a Chicago real estate investment firm, leasing it back for 99 years and raising up to $500 million to help build its proposed $1.74 billion Chicago casino complex.

Oak Street Real Estate Capital acquired the River West property Monday for $200 million in the sale-leaseback deal, with a commitment to provide up to $300 million more in additional funding to develop the casino.

“It’s just another step forward in making sure that the project is fully funded,” Bally’s Chair Soo Kim said Monday.

A spokesman for Oak Street declined to comment.

The Rhode Island-based casino company bought the printing plant site for $200 million Friday from Nexstar Media Group. The Dallas-based TV station owner acquired the Freedom Center site in 2019 as part of its $4.1 billion purchase of Tribune Media — the former broadcast parent of Tribune Publishing.

Bally’s said earlier this month it planned to sell the land and lease it back to raise money for the proposed casino. As part of the sale-leaseback deal, Bally’s entered into a 99-year ground lease with Oak Street, with 10 options to renew for 20 years each, according to a news release Monday.

While the firms did not disclose the specific terms, the initial lease is calculated to yield an 8.5% annual capitalization rate for Oak Street, according to the release.

“With this new real estate partnership, Bally’s has ample liquidity on hand to fund Bally’s Chicago without needing to access the capital markets,” Bally’s CFO Bobby Lavan said in the release.

Founded in 2009, Oak Street Real Estate Capital specializes in sale-leasebacks and has $18.6 billion of assets under management, according to its website. The firm was acquired last year for $950 million by Blue Owl Capital, a New York-based alternative investment management group.

Bally’s entered into a sale-leaseback agreement in July with Gaming and Leisure Properties for its Bally’s Tiverton Casino & Hotel in Rhode Island and the Hard Rock Hotel & Casino in Biloxi, Mississippi, that will net the company $635 million, which it also plans to use to fund the Chicago casino development. That deal is expected to close in January.

Bally’s owns and manages 15 casinos across 10 states. It made its entree into Illinois in June 2021 with the $120 million acquisition of Jumer’s Casino & Hotel in Rock Island, which it renamed Bally’s Quad Cities.

In May, Bally’s won a heated competition to build the Chicago casino, which is expected to generate $200 million in annual tax revenue for the city.

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