REIT Watch: Penn National Gaming Gets Closer to REIT Creation

on Jul 11, 2013

**United States**

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**Penn National Gaming Receives Regulatory Nod for Split** Thursday July 11th: Penn National Gaming (NASDAQ:PENN), a gaming company with a focus on slot machine entertainment, said yesterday that it had received preliminary approval by Nevada gaming regulators to split into two publicly traded companies.
The company is planning to spin off 19 of its 29 casinos and racetracks into a real estate investment trust, which will be known as Gaming and Leisure Properties. After the split, which was announced last November, investors in Penn National will receive a dividend of about $5.35 per share plus equity in the newly created REIT. The casino operator company will be renting 17 of the 19 properties in the REIT’s portfolio.

Pen National’s chief financial officer Bill Clifford has told investors that the REIT would offer Penn National increased expansion opportunities. The split is yet subject to approval from the Securities and Exchange Commission.
Penn National Gaming’s share price today rose by 0.81 percent to $53.36 following news of the preliminary approval.
**Select Income Acquires MeadWestvaco’s HQ Building for $143.6 Million**

Select Income, a real estate investment trust investing in net leased, single tenant properties, disclosed yesterday to the Securities and Exchange Commission that it had acquired the headquarters building of packaging giant MeadWestvaco. The property has a gross leasable area of 310,950 sq. ft. and is located at 501 S. Fifth St. in Richmond, Virginia. The REIT paid $143.6 million (₤95 million) for the building.

Bruce Hazelgrove, a vice president at the building’s previous owner NewMarket, has said that the sale
would not affect the lease of the office building. MeadWestvaco’s lease runs through June 2023 and includes pre-negotiated options beyond that.
Select Income REIT has reported that as of March 31, it owned 272 properties with about 25.4 million rentable sq. ft. The company’s occupancy rate at that time was 95.8 percent.

**Analysts on CommonWealth REIT**
!m[Select Income Buys MeadWestvaco’s HQ Building for $143.6 Million](/uploads/story/3902/thumbs/pic1_inline.jpg)
Zacks yesterday downgraded CommonWealth REIT’s shares to “neutral” from “outperform” in a note issued to investors. The research firm gave the stock a price target of $25.60.
CommonWealth REIT has seen its market capitalisation increase by almost fifty percent in the year-to-date after two activist investors said in February that they were willing to acquire the real estate investment trust (CommonWealth REIT’s Share Price Jumps 50 Percent On Acquisition Offer).
**Penn National Gaming’s share price was $53.35 as of 11.07.2013, 15.04 BST.**
**Select Income’s share price was $27.59 as of 11.07.2013, 15.04 BST.**
**CommonWealth REIT’s share price was $23.46 as of 11.07.2013, 15.05 BST.**


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