Gaming and Leisure Properties Inc (GLPI) Q4 2020 Earnings Call Transcript

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Gaming and Leisure Properties Inc (GLPI -2.23%)
Q4 2020 Earnings Call
Feb 19, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings and welcome to Gaming and Leisure Properties Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to Joe Jaffoni, Investor Relations. Thank you. You may begin.

Joseph Jaffoni -- Investor Relations

Thank you, Sherry and good morning everyone and thank you for joining Gaming and Leisure Properties fourth quarter 2020 earnings call and webcast. The press release distributed yesterday afternoon is available on the Investor Relations section of our website at www.glpropinc.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ materially from those discussed today. Forward-looking statements may include those related to revenue, operating income and financial guidance as well as non-GAAP financial measures such as FFO and AFFO. As a reminder, forward-looking statements represent management's current estimates and the company assumes no obligation to update any forward-looking statements in the future. We encourage listeners to review the more detailed discussions related to risk factors and forward-looking statements contained in the company's filings with the SEC, including its 10-Q, the earnings release and definitions and reconciliations of non-GAAP financial measures contained in the company's earnings release.

On this morning's call, we are joined by Peter Carlino, Chairman and Chief Executive Officer of Gaming and Leisure Properties, and Peter is joined by Desiree Burke, Senior Vice President, Chief Accounting Officer and Treasurer; Brandon Moore, Executive Vice President, General Counsel and Secretary; Steve Ladany Senior Vice President, Chief Development Officer; and Matthew Demchyk, Senior Vice President and Chief Investment Officer.

With that. It's now my pleasure to turn the call over to Peter Carlino, your host. Peter, please go ahead.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Well, thank you, Joe, and welcome to all who have dialed in this morning. Let me start by saying that 2020 was a bizarre year I think for all of us, and I'm just glad to be on this side of a brand new year. But there are some good things that came out of last year for the company, we in many respects had one of the most successful -- if not the most successful year we have had in since our spin into GLPI. The part of the good news is that we have proved what we've been saying all along that the real strength of gaming is in the regions, not in Las Vegas. We've always -- in the regional area sold at a discount, look, I get it. The win is a loss due to spectacular property, love to own it, but I'd rather have frankly if we were able to sit in return on investment, the kind of properties that we build at Penn and the kind of properties that are in the GLPI portfolio, we will and did collect 100% of our rents this year, which is terrific. In the worst of times, which is what we have said all along, would be the case and we did a number of things as well to -- along with some undisclosed by the way to strengthen relationships with each of our tenants notably, as you know, we provided the ability with a rent credit to help Penn at the time when maybe solvency was a question. That move has proven to be spectacularly successful. Obviously great for us, our tenant is stronger by leaps and bounds, but moreover, you can see what's happened with them. So we have to feel particularly good. We acted swiftly, we acted early, there were a lot of questions about that at the time that we felt it was the right thing to do in the long run and boy that proved to be a great, great result.

Along the way, let me just highlight a couple of things, because of the things, as I look at a summary here in front of me, that so far back in 2020 I almost forgot that have occurred. I'll remind you that we did enter into a membership interest purchase agreement with Penn for the Hollywood Casino in Perryville. With Caesars, just quickly go through a couple of these things, we amended the Tropicana Master Lease with Caesars to remove variable rent components, provide a fixed escalation and permit replacement of Tropicana Evansville and/or Greenville at the time as well as the removal of Belle of Baton Rouge, complex and difficult things, but we got that accomplished for them. We exchanged Tropicana Evansville for the Isle Casino Hotel in Waterloo, the Isle Casino Hotel in Bettendorf. We entered into a repurchase agreement, which is very cool to pick up the Evansville property again, it was done and we're thrilled to say we got it back, which was not a foregone conclusion in the lease with Bally's, formally Twin River Holdings and then we permitted to transfer Belle of Baton Rouge to Casino Queen, which is owned by Standard General.

Moving on quickly, we entered into a membership purchase agreement to sell operations at Hollywood Casino Baton Rouge. We agreed to the terms of the new master lease between Hollywood Casino, Baton Rouge and Casino Queen. And finally, we entered into an agreement provided a $4 million recovery of unsecured loan previously written off by the Company with Casino Queen. With Bally's we entered into agreement to acquire Dover Downs in Delaware, terrific. We're excited about that, agreed to the terms of the new master lease that would include Dover Downs in the Tropicana Evansville and we helped to broaden our tenant base further, which is always an objective for us. Miscellaneous stuff I almost forgot, we acquired Lumiere Place in St. Louis, which we converted from an unsecured loan that's way back, but that was a massive accomplishment more than you might guess, that we're quite excited about. We acquired to Belterra property in Cincinnati from Boyd Gaming in satisfaction of a loan. We also notably received approval to go landside with our Hollywood Casino property in Baton Rouge, we're working on that right now.

I will say, it would appear GLPI is the only you REIT to announce and sign a real estate acquisition following the COVID [Phonetic] announcement last year. So as I look back on this, it was a pretty strong year for us, we're hungry and interested and hard working now as ever, if I can get that commercial. And on has to feel pretty good about the regional gaming business in the regional REIT business as well.

With that, I've already said more than I usually like to say upfront, I'm looking at Desiree and I'm going to ask her to make or highlight a few points as you thought you should be aware of.

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Thanks, Peter. Good morning everyone and thank you for taking the time to join our call. Our performance for the quarter was good is we're ahead of all of our key metrics compared to the fourth quarter of 2019 due to the fact that we fully collected the Casino Queen rent in the fourth quarter and combined with their rent deferral agreement of $4.6 million. In addition, we had several non-cash items that are included in our P&L that I thought I should highlight. First, as Peter mentioned, we had the Caesars exchange transaction, where we exchanged Baton -- we exchange the Tropicana Evansville and received Bettendorf and Waterloo in return. We had to recognize the non-cash gain of $41.4 million in our income statement.

Secondly, some straight-line rent adjustments in the quarter and those are -- we're just deferring less rent as a result of the accounting rules than what we had in the past. For more information on that, Note 14 in our 10-K has a lot of details about how we will recognize that rent deferral over the next several years. The percentage rent reset for Meadows occurred on October 1st and the rent reset was down by $500,000 for the quarter or [Indecipherable] million for the full year. This is our last percentage rent reset until 2022,obviously excluding the Ohio percentage rent for Casino Columbus and Toledo, which as we've disclosed Toledo is in a rent for $22.9 million. Additionally, our TRS properties continued with strong results. Their net revenue and adjusted EBITDA were both up $1.3 million and $2.4 million compared to a year ago. We continue to see strong spend per visit, which is more than offsetting the reduced attendance levels. Our net income FFO, AFFO and adjusted EBITDA for the fourth quarter were all ahead of the prior year, which is detailed throughout our release.

And with that, I'll turn it over to Matt.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, and Matt, you want to add a few thoughts as well, please?

Matthew Demchyk -- Senior Vice President of Investments

Sure. Yeah, first turning to our balance sheet just after the third quarter call. We completed a successful equity raise the pre-fund our Bally's transaction, delivering on our promise of prudent balance sheet management. As a result, our balance sheet is characterized by robust liquidity and thoughtful leverage. In addition, our long dated unsecured debt yields continue to trade materially inside those of our peers. This is a valuable validation by the debt markets of the safety inherent in our business model and a clear benefit to the weighted average cost of capital that we utilize for transaction. Based on the strength of our position, the theme for 2021 at GLPI that is being offensively postured. As we navigate opportunities, we remain prudently discipline in our focus on achieving a margin of safety and our appetite remains voracious. Our teams decades deep relationships across the gaming sector and our unique track record of being creative and structuring win-win solutions for counterparties, both stand to be competitive advantages. Our team is committed to making the most of the opportunity set in 2021.

As I wrap up, I'd like to take a step back for perspective. More than a decade ago before we are asset class suggested, the global financial crisis tested cash flow resilience across the economy and the real estate world. Real estate asset classes that were newer, quickly became battle tested. New winners and losers became evident and at times contrary to traditionally held expectation. In the many years since, pricing trends and institutional interest, this come to reflect the durability demonstrated among -- amid challenges. As the old saying goes, a hammer shatters glass, but forges steel. Of late, the entire world has been subject to the rest with the new and different hammer. The unique and challenging backdrop presented by COVID-19 has resulted in yet another significant test for our broader economy and across the spectrum of real estate assets. And thus far, triple net gaming assets, especially regional ones like found in our portfolio have collectively proven far more resilient in the vast majority of real estate that is currently considered to be of an institutional quality, while the case study is still being written, it will undoubtedly serve as an important sign post on the path toward institutionalization and multiple compression for gaming real estate -- multiple expansion for gaming real estate.

With that, I'd like to hand the call back to Peter.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thanks. Matt. So in summary, I think 2020 was a great year for GLPI and I can say -- I'm said about leaving it as we move into 2021, but it was a very impactful year. So with that, we will open the floor to questions and perhaps a create an opportunity to hear from the rest of our team present today. So operator, would you please go ahead?

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question is from Barry Jonas with Truist Securities. Please proceed.

Barry Jonas -- Truist Securities -- Analyst

Hi guys, good morning.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Hi, Barry.

Barry Jonas -- Truist Securities -- Analyst

Hey, let's just start with the current M&A environment. I would love to get any updates there what the pipeline looks like and any notable changes over the past 90 days?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Why don't I look at across to Steve Ladany, it looks -- there is life out there, but I'll leave it to Steve to tell you what he feels again.

Steve Ladany -- Senior Vice President, Finance

Sure. Yeah, good morning Barry. I think from a technical perspective as far as the M&A landscape in front of us, on the non-gaming side, we continue to see myriad of opportunities coming across our desk. As you'd imagine, gaming has held up wonderfully during the COVID experience, but other non-gaming areas of the leisure space etc. have not. So there is a number of opportunities to continue to come across our desk. However, as Peter has said many times before, we continue to believe that gaming presents us with the best opportunity for outsized returns on a risk-reward basis. So as much as we are looking at other opportunities, the M&A landscape in the gaming space continues to be very active and there are a number of discussions we continue to have with a number of parties both existing and potential new operators.

Barry Jonas -- Truist Securities -- Analyst

Great. Great, that's really helpful. And then just as a follow-up, can you give us a status on the Belle of Baton Rouge, I know Caesars sold to Casino Queen and it was removed from their master lease with no adjustment to the rent. I'm just curious what your -- if you guys don't own it or what the status is there and if there's any opportunity for incremental ramp down the road? Thanks.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Brandon, you have to take this, it's part of that regulatory piece.

Brandon J. Moore -- Senior Vice President, General Counsel & Secretary

Yeah. That transaction is not yet closed, but I think they've announced that Caesars has agreed to sell the Belle of Baton Rouge operations to the Standard General Casino Queen team, but that's subject to regulatory approval by the Louisiana Gaming Control Board still. Our intention is to continue to own that property, so currently, that property is still in the Caesars lease, if that transaction is approved in Louisiana we'll remove it from the lease and put it in a separate lease with the new Standard General team, but our intentions at the moment are to continue to own that property.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

And there is no adjustment to the Caesars Master lease if that transaction does occur and that property comes out.

Steve Ladany -- Senior Vice President, Finance

Got it, OK. I guess we'll wait and see. All right, thank you so much, guys.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thanks, Barry.

Operator

Our next question is from Greg McGinniss with Scotiabank. Please proceed.

Greg McGinniss -- Scotiabank -- Analyst

Hey, good morning. Peter, we've been getting a lot of questions from investors regarding the CIO and CDO roles as they seem a bit duplicitous. Can you please walk us through the need for creating both those roles and how responsibilities are split between the two?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

We've had a couple of questions like that along the way. But look, it's actually in our minds, pretty, pretty straightforward. Steve's job primarily is to source opportunity within the gaming world with which he is quite familiar and Matt I'm simplifying this, is to look at -- it's place in our portfolio, its valuation, its financing and all of the elements that relate to, well, if we have an interest in a property, what does it look like, how do we fit in their balance sheet, that we pre-finance. So you've seen some evidence of that already, that's max influence. So I can appreciate the confusion, but there are really two different roles, the guy out on the road, if you will, by phone or in person is Steve, the guy on the phone, if you will, who works this is Matt. So -- but look the two work together, our team works together and functionally frankly it's working fine.

Greg McGinniss -- Scotiabank -- Analyst

Okay. Thank you. And then for a follow-up, the questions on these calls are so often focused on the acquisition pipeline and I don't really feel like breaking tradition this morning. Are there any Casino assets that are currently for sale and being marketed right now, and if so what I kind of EBITDA do those assets generate?

Steve Ladany -- Senior Vice President, Finance

So to clarify the question, are there currently casinos being marketed?

Greg McGinniss -- Scotiabank -- Analyst

Yeah.

Steve Ladany -- Senior Vice President, Finance

Yeah, I mean, there are many opportunities obviously we're under NDA, but I can give you a sense. I mean there are some that are not so private that there have been public leaks, very large-scale assets that are for sale on the Las Vegas trip. But there's also individual smaller single property assets that exist as well and in between those two, our portfolio trades that could occur with multi-properties. I mean, I think one of the things that we are seeing is that with the margin improvement of these properties, I think the sellers are trying to figure out where they are in fact going to land, as far as a run rate, and that's part of the complication on the buyer side as well is the new operator, if in fact it's a wholesale transaction needs to also contemplate where they believe margins will settle in.

Greg McGinniss -- Scotiabank -- Analyst

All right, thank you.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, there you know how to answer that. Clearly, it's -- there is always activity of one sort or another, actual activity is another matter. So, in our job as I've said for many, many years is to -- we look at everything. If it's alive and breathing, you've heard me say this many times before you can imagine, we're looking at it. What's doable is always another matter and when you get the seller's interest aligned, I mean, if you were to go out now and say what's for sale, well, I don't know, I think I can find that property is on the strip, you could probably buy, but these things evolve as they do. And our job frankly is just to be ready prepared financially, that's a big role that Matt plays, of course to make sure that we are -- as he said earlier offensively posturing to be ready as opportunity appears. So I mean that we are.

Greg McGinniss -- Scotiabank -- Analyst

I appreciate that, Peter. Thank you.

Operator

Our next question is from Jay Kornreich with SMBC. Please proceed.

Jay Kornreich -- SMBC -- Analyst

Hey, good morning. I guess just sticking with -- sticking with the acquisition pipeline, can you just provide any update on your dialog with Bally's, either around potential sale leaseback within their current Casino portfolio or further expansion with you?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Steve?

Steve Ladany -- Senior Vice President, Finance

Sure, I mean, Bally's is no different than our other tenants and that we talk to them very frequently about different opportunities, whether they are within their current existing portfolio or potential opportunities to expand. I mean I think the world has come to recognize that they have been growing pretty rapidly and looking at expansion. So we are constantly talking to them about what opportunities exist, what markets they may be interested in and what things we can help them shake loose. So yeah, we're in constant dialog.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah there look they're hungry buyers, I think as Steve says, they're very hungry and we want to be their partner of choice. So we work at that very hard.

Jay Kornreich -- SMBC -- Analyst

Okay. And then I guess moving to Casino Queen, which was your troubled tenant and now give a master lease with them they paid back their deferred rent $4 million of the loan and you have this rule for agreement. Can you maybe just provide an update on their performance and is this an operator that you'd like to expand further with?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Who wants to take that, Steve?

Steve Ladany -- Senior Vice President, Finance

Sure. So I think one clarification I would make is that the master lease would exist post their acquisition of our TRS Properties. So, currently, that's still in a single asset lease. I think the -- we are very comfortable with the management team. They are experienced, they've worked in very competitive marketplaces like Vegas locals markets and so I think we're comfortable that they have the talent and necessary required to continue to manage these properties and get the most out of the performance and as far as their interest in growing, I think it's very similar to what you've heard with respect to Bally's. I mean I think they are interested in acquiring assets, expanding their footprint and I think they will continue to look to enhance the reach, especially on the sports betting and I-gaming side as well, which you've seen with the renaming of the Casino Queen asset to DraftKings.

Jay Kornreich -- SMBC -- Analyst

Okay, thanks very much. That's it for me.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question is from Daniel Adam with Loop Capital. Please proceed.

Daniel Adam -- Loop Capital -- Analyst

Hi, good morning. Thanks for taking my question.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Good morning.

Daniel Adam -- Loop Capital -- Analyst

So this is, I believe the first earnings call where Penn's market cap is larger than GLPI is roughly about 80% larger. Peter, I'm just curious, what do you make of that dynamic, if anything?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

It's great. Terrific. Look it's always nice to have a tenant that -- that is well capitalized and at this time Penn clearly is. Look, I mean I founded Penn. So, as you well know and seeing it grow and do what it has been able to do and it's been transformative, it's quite remarkable. By the way, the question hasn't been asked yet, but it's an opportunity for me to sort of jump right to it and that is this, I think what they're doing with the bar store brand is an enormous enhancement to the bricks and mortar property that we own, feel very confident about that. Penn is committed to build out bar store-themed facilities at its properties. I think that role has begun now. People are social animals. I think you're going to find whatever else is done on -- on the Internet, that a guy placing a better football game on a Saturday morning is driveway, you're going to find a tremendous lift, I'm utterly satisfied in the properties that we own as well and it's going to help change the demographic of who comes and plays of these facilities and so forth. So I couldn't be more excited about what's going on at Penn. I think it's a huge plus for us at GLPI and you know it's -- Brandon is going to say...

Brandon J. Moore -- Senior Vice President, General Counsel & Secretary

I'll just say, well, it's exactly why we did what we did, when COVID hit in early 2020 was to assist our largest tenants and ensuring their long-term success. And I think what's happened with them since that transaction that we did for Tropicana Las Vegas to help them out in the time of need, it has benefited them greatly and therefore benefited us greatly.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

And I think they've got approved the ability to be profitable and our well before any other player in the field, and that's a huge advantage that they expect to capitalize on. So look, the company is well run, they have ambitious goals. It's -- I could feel better about what's happening with Penn, getting all to our benefit in having a strong well capitalized tenant.

Daniel Adam -- Loop Capital -- Analyst

Okay, great. That makes lot of sense. And then I guess related to that, any update on the timing and level of interest in a possible sale of the drop in Vegas? Thanks.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, look, at others I mean, Steve is a lot closer to it than I am, although Matt also has had contact with people. There has been a shocking number to my mind, I'll use that word, people coming out of the woodwork signing NDAs to take a look at it. Now, a lot of them, I will say or what I call the dollar down, dollar a week crowd [Phonetic] with transactions that wouldn't interest us at all, because they can't. We're not -- we're not intending to take any risk whatsoever. We're looking for a cash buyer, if possible we could participate in something, but never to put our capital at risk, never. I can't underscore that enough. So there is some pretty good activity out there. It's -- who knows, again got a caveat that with who knows what will get to the signing line, but I would say that it's been pretty impressive. Steve, do you want to comment?

Steve Ladany -- Senior Vice President, Finance

Yeah, I just said, we have a very -- there are a few parties that have shown very strong interest and so we continue to work on that, but I would also add that the Coke transaction that just occurred at the Fountain Blue [Phonetic], we view as a very positive signal for our ability to exercise our sales process.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

I think, would you want to add anything Matt, any thought?

Matthew Demchyk -- Senior Vice President of Investments

Yeah, the one other thought that's relevant is just we're seeing signs of a little loosening of the debt markets for developments, which is another encouraging development in that market. And I'll just remind everyone that every potential buyer is looking at meaningful redevelopment plan there to help maximize the potential of the assets. So that's going to be an important element for anyone who buys it and I'll remind everyone we were in a balance sheet position where we don't have to do anything. So we're going to wait until we have a good deal, if and when we'll move forward.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

That said well. So look, we would never want to promote stuff that frankly would mislead you in any way at all. And so we know certain -- it's not certain, but I will tell you in all honesty, we're kind of heartened by the level of activity is perked up as we have gotten into 2021 with some serious buyer. So that's what we can report today.

Daniel Adam -- Loop Capital -- Analyst

All right, very encouraging. Thanks guys.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question is from Thomas Allen with Morgan Stanley. Please proceed.

Thomas Allen -- Morgan Stanley -- Analyst

Hi, good morning. Can you update us on your dividend? You announced in the release that you're going to go back to being a full cash dividend payer. But just, kind of, how you're thinking about it, medium to long-term? Thank you.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Well, we're thinking about it a lot, but I'm going to give you half an answer, because unfortunately timing is just not worked out well for us. We have a Board meeting next week to discuss the dividend track. I think looking at a General Counsel. We should be prepared to get an announcement out next week, Brandon. Should we not?

Brandon J. Moore -- Senior Vice President, General Counsel & Secretary

We expect it would be next week.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

We expect we will. Look, we have said cash dividend 2021 and you can count on that. The precise amount, we've also said we're not going backwards, so the goal of course is to move forward, but we can get ahead of the Board and all I can say is, by the end of next week, you should have an answer. Look, you recall, I am first and foremost a shareholder in this company and my thoughts are completely aligned with what's best for shareholders. I want to move the highest possible dividend at the earliest possible time, consistent with prudence and this is good sense. So we're going to look at it carefully and remember the goal is to build value, to build dividend income over the years. We've done that all along. We are back to that, just how far how, fast we can push it, we'll let you know, shortly, but you can expect the cash dividend going forward.

Thomas Allen -- Morgan Stanley -- Analyst

Perfect, thanks. And then just a clarification on Casino Queen. So you've gone back to receiving $3.6 million a quarter of rent, there was this catch-up payment in the fourth quarter for what wasn't paid in the third and second, and then once the Baton Rouge door closes, then it goes to that $21.4 million run rate, is that -- is that right?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Des, you want to...

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Yes. So, yes, you're correct. We collected $4.6 million of deferred rent in the fourth quarter. So our rent as of 2020 is fully collected. They were closed in 2021, so we have a small deferral that we expect to collect in 2020, when the sale of the Baton Rouge property is finalized. And yes, your number is correct, that it goes to the increased rent once the deal closes.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah. It's tied to the other transaction with certainty, so that will get paid. Hopefully, they remain open as going forward, but even if they don't, we still get paid.

Thomas Allen -- Morgan Stanley -- Analyst

For the next couple of quarters until the deal closes, it should be $3.6 million of rent, but then given they closed for a period of time, maybe slightly lower in the short term, is that what I'm hearing?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Yes, it's about $2 million of rent that was deferred for January and February, but then I'll go back to cash since they've reopened their property and that $2 million, we expect to collect during 2020 when we close on the transaction.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

But in any case we will collect.

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Yeah.

Thomas Allen -- Morgan Stanley -- Analyst

We're certain.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yes.

Thomas Allen -- Morgan Stanley -- Analyst

Okay. Yeah. Got it. I just want to make sure we're modeling correctly. Thank you.

Operator

Our next question is from David Katz with Jefferies. Please proceed.

David Katz -- Jefferies -- Analyst

Hi, good morning everyone.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, good morning.

David Katz -- Jefferies -- Analyst

Good morning. So, look your comments are quite clear about the Las Vegas Strip and a preference elsewhere within regional gaming, I'm just trying to think through other avenues of growth on the margin where there might be sort of elements of specific regional properties such as a hotel or retail element right outside of just owning the Casino four walls and whether those kinds of opportunities are out there and interesting in some way?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

David, they certainly are interesting and they are out there. We continue to talk with Penn. I think we've brought that up before about a hotel in say Columbus and some other development that could occur. Some of our -- I think some of our open property, undeveloped property has had interest recently for different kinds of users. We certainly had offers to sell some, but as I like to say, we're not really in the sale business, we're in the income business and that's not to say we wouldn't sell for some generous price we might have to suck it up and take the money, but our real goal is to build revenue over time and yes, we are actually looking at a variety of things and time will tell.

David Katz -- Jefferies -- Analyst

And just to follow that up, if we were to sort of qualify between you know owning sort of a new hotel right or participating, I think you've said no participating in development of any kind, right, that's sort of putting capital at risk. So you'd be sort of owning the real estate on normalized or mature assets rather than sort of newish ones, is that fair?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

We do a new property with a credit tenant. I mean we're not taking the risk, the risk is going to go elsewhere. So, somebody is going to step up who is going to be able to support it. Again, I've long said it on the Penn side, you will remember I love saying it again, we are not in the gambling business, our customers might be, but we are not and that never is going to change. We don't take risks that we can avoid.

David Katz -- Jefferies -- Analyst

I understand. Thanks very much.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question is from RJ Milligan with Raymond James. Please proceed.

RJ Milligan -- Raymond James. -- Analyst

Hey, good morning guys. I was wondering if you could just walk us through how we should think about both the escalators in the variable rent components in '21 and '22 given we're coming off such a low EBITDA year in 2020?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Dess, we're looking at your direction for that.

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

All right. So if you look at the release, we have a table in the release that details out the performance of the adjusted revenue to rent ratio for most of our tents and it describes how escalation would occur if in fact it did occur. So it is at lease by lease view on what you expect to happen in 2021. I would say that we're not expecting escalators in 2021 for the most part, but we could be surprised. I mean, I'm looking at information that is related to 2020 and either projections for all of our tenants and how they performed into 2021 is unknown at this time. But as far as variable rent resets -- percentage rent resets we've done with those for 2021, there are no percentage rent reset, the next one does occur in 2022 and we have a lot of data together before them to know what those resets would look like.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah. I should have started with it, just a brief comment. I want to get into the commercial for our financial and our legal team here that we've always prided ourselves on releases that provided an enormous amount of detail and as we put as much in that as you can possibly taking the time to read. So there is a lot of detail and hopefully that can answer it.

RJ Milligan -- Raymond James. -- Analyst

Okay. Yeah, the table is helpful. Thank you.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

Our next question is from Shaun Kelley with Bank of America. Please proceed.

Shaun Kelley -- Bank of America -- Analyst

Hi, good morning everyone. I just wanted to get some thoughts on maybe the depths, as we're thinking about the buyer pool and the M&A environment, broadly, I think we're starting to see some new people arrive on the operating front as well and I specifically want to get your kind of take on some of the Native American operators looking at the OpCo side of transactions and what that might mean for the broader depths of the kind of buying and selling market or the transaction market if anybody had any thoughts there?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Well, it's a good thing and we have entertained conversations with such votes over time. Nothing at the moment actionable. Steve, do you want to add any thought to that?

Steve Ladany -- Senior Vice President, Finance

Sure. So, I think we are going to continue to see the trend. I think a number of the Native American tribal gaming enterprises are well-capitalized and looking for areas to reinvest their capital in industries that they're comfortable with, which at this point is definitely Gaming. So I think it's a -- I think it's something that we're going to continue to see. I think -- I think there is also a number of instances with some of the casino expansion that's been proposed in different jurisdictions like Alabama in Nebraska where some of that could also come into play. So it's an area we're focused on. We're looking at and we continue to try to build out relationships there, because I think it is an opportunity for growth going forward.

Shaun Kelley -- Bank of America -- Analyst

Great. And Steve my other question, it referred to something you mentioned earlier about some of the challenge in underwriting right now is this the flux that sort of the margin profile of a number of kind of Casinos find themselves in hopefully it's largely a good thing, but I just wanted to get your thoughts on what do you think that the long-term implication on valuation is from what many people are viewing as a bit of a structural change in margin? And sort of just thinking, will this result in potentially higher overall valuations and similar metrics or could it result in higher rent coverage ratios are just kind of, how are you thinking this might actually start to play out?

Steve Ladany -- Senior Vice President, Finance

Well, I don't have crystal ball, but if I had to guess, I would suggest it probably for new transactions, which I'm assuming that's what you're asking me about. So on a new potential transaction, I don't think it necessarily changes the rent coverage that's underwritten by a landlord and a tenant. And I don't think it necessarily changes the valuation that the landlord or the tenant would pay on a multiple basis. I think what changes, is that now, you're -- there is more cash flow and therefore when you multiply the larger EBITDA times all those factors, you're just going to get to a higher total valuation. So I think that's the main driver. I mean, separate from that I think a lot of value is going to be determined by the Opco and that's going to be driven right now by whether there is sports betting or I-gaming on the forefront in that jurisdiction or did the property already cut skin deals and there is no opportunity or is it wide open and operator that acquired the asset now has that market access. So I think those are some of the variables that will continue to drive some of the valuation anomalies.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

And let me squeeze in one thought about that, this is still early days and we all see these margins reduced occupancies, higher margins. It's a bizarre, it's an incredible anomaly, a very positive one and I think it's going to be much sustainable. Is it completely sustainable? Well time is going to have to tell. So from a buyer's perspective, buying of numbers today probably involve some level of risk or judgment or however you might want to look at it. But I do think, because I get that question a lot, is this sustainable? I think we're not going back to where they were. They found that they can operate these operating companies much more efficiently, but is it going to remain where it is? That's still an early unknown, that's my view.

Shaun Kelley -- Bank of America -- Analyst

Thank you very much.

Operator

Our next question is from David Gallagher [Phonetic] with Green Street. Please proceed.

David Gallagher -- Green Street -- Analyst

Good morning everyone, thanks for taking my question. Just a follow-up on Penn. Obviously market cap growth over the last year has been tremendous. And certainly, there are a much healthy liquidity position now to pay a year ago. Moving forward with that relationship, does that change how you view rent coverage at all? Understanding of these are obviously long-term leases and property level dynamics are important. Does that change how you view rent coverage?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Anybody want to open on that?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Yes, I mean the rent coverage is specific to the lease and the properties that's in the lease. So no that would not have an impact on what we would expect for rent coverage on the lease.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah.

David Gallagher -- Green Street -- Analyst

Yes, I think, just to clarify what I meant is, I would say, would you be willing [Speech Overlap] rent coverage, given the corporate, it's a little bit stronger?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yes. I think it as we're going. Yeah, maybe, and the best most I can say, but -- maybe, but not much. I mean I think we're comfortable with the range we are. Matt, what do you think?

Matthew Demchyk -- Senior Vice President of Investments

It's not our intention to take less. I mean we haven't looked at the corporate level of coverage, we've been focused on the four wall coverage for all the right reasons historically. So I think going forward, you'll see us continue to focus on four wall coverage because at the end of the day, it's a duplicative benefit, right, you get the greater of the corporate coverage or the asset coverage and as we move forward, I think that discipline will serve us well.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Well, even though they're in a master lease, I think we've always looked at four wall coverage. Some of our competitors are a bit less vigorous in that area, but we prefer to have four wall coverage that we feel good about.

Matthew Demchyk -- Senior Vice President of Investments

Yeah. Ultimately, the corporate coverage really speaks to the multiple that the cash flow should trade at right because this is a very senior lien in their capital stack. But at the end of the day they're going to view it as a business unit like everyone else would and when it comes up for renewal, it's going to depend on our profitable those assets are. And that's why we have the highest four wall coverage that we focused on that out of our peer set.

David Gallagher -- Green Street -- Analyst

Got it. I makes sense. Just a quick follow-up. The right of first refusal for Casino Queen, can you give us maybe some potential opportunities that could arise with that relationship with Casino Queen in that right of first refusal?

Brandon J. Moore -- Senior Vice President, General Counsel & Secretary

It's hard to say at this point to be totally honest. I think it's -- I think they are focused on closing out the two transactions that they've announced that they have signed, one with us and one with Caesars and and so I think they continue to look to try to find areas to grow, but -- but I don't have a good sense to be able to give you any guidance around what that means on a quantitative.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

I do get the sense in talking with their principle that, they're are committed to doing more business with us. That is for a variety of reasons, and I think it's pretty clear that's the intent. So, we're staying in tune with what they're up to and anxious to help if and when we can.

David Gallagher -- Green Street -- Analyst

Got it. Thank you everyone.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Happily, they're very aggressive. Great. Good to have a hungry partner.

Operator

Our next question is from John Massocca with Ladenburg Thalmann. Please proceed.

John Massocca -- Ladenburg Thalmann -- Analyst

Good morning.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Good morning.

John Massocca -- Ladenburg Thalmann -- Analyst

So what is your view on guidance going forward? Is that something you would feel comfortable providing again after some of these outstanding deals closed or might that be somewhat more contingent on a normalized operator environment, given how that impacts escalators?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

You know, that's a very fair question. It's one we're kicking around hot and heavy here. It will be a board discussion shortly as well. Look, while we have the TRS is out there kind of in limbo, not sure when precisely they're going to close, and that obviously would have some big impacts. We just don't think it's investors best interest to have us put something out there that could be wildly dependent upon timing of closings and so forth, wrong. When we are free and have closed those transactions and we're down the pure read operations, I think that's something we could well consider. I'm looking at Desiree, I think shaking her head in the positive way, so what do you think?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

No, I agree. So right now we have the Bally's transaction also, which would be $10 million a quarter in rent, right. So, not knowing the timing of the sale of the TRS operations, not knowing the timing of the closing of the balance expansion, we just thought it better to get more clarity around those things before reconsidering guidance.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

That kind of says it. Yeah, but we -- think -- a serious look at it post these transactions.

John Massocca -- Ladenburg Thalmann -- Analyst

Great. It makes plenty of sense. And then building on Greg's question earlier in the call, there is one kind of traditional C level position, if you will, that you don't have filled with the company. I guess as you think about the expertise that you have in CAO, CIO, CDO positions. Do you think you need to hire a CFO at this point?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Well, the quick answer is the proof is in the pudding, we haven't because we don't. We really don't need such a person, now, look, we're going to have to fill that role at some point along the way. We put that issue on hold, I mean, right now we function is kind of the Office of CFO with Desiree, Matt and Steve fully capable and the rest of our team internally of doing as you can see, everything that needs to be done, there is no lack of talent capability or anything you run the company like this forever. But it looks like a hole in the program, and we got a pop a name and there at some point and we will, but we're not under any pressure to do it. And I think the proof is in the pudding, you look at it, today. I mean, we pride ourselves on precision with what we present over all the years that I've been in this business and our team has been together for a pretty long time. So that's really the best answer I can provide. When you have as much talent as we have here, we interviewed some very capable people, but it almost has to be this team looks across the table and says wow, you got Harriet or you George, or you got -- but it has to be somebody so compelling that exceeds the capability that we've got here. And so for the moment we are kind of going to play with the opposite of CFO, we haven't announced it publicly that way, but it might help you to know for the moment at least that's how we're thinking about it.

John Massocca -- Ladenburg Thalmann -- Analyst

Okay. I mean if you think about the asset class, it's a pretty easily manageable asset class. You said you have this group of talented people around, you mean, CFO is an extra cost and it's not a huge, but it is an extra cost. Is there any thoughts of maybe just either not selling it at all or just changing a title in order to kind of not add the extra G&A, if you will?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

The answer is yes and maybe. Got it?

John Massocca -- Ladenburg Thalmann -- Analyst

Okay.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

We are actively thinking about that right now. But I think you know and you can see that we have all the capability in this company that we need to do what we do.

John Massocca -- Ladenburg Thalmann -- Analyst

And then just a quick modeling question with regards to Casino Queen, I know you put them on cash accounting in 2Q, are they back on an accrual basis today and as of 4Q '20?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

No, they're still in cash accounting basis. Once you elect this, you'll have to stay with that, so they're on cash accounting.

John Massocca -- Ladenburg Thalmann -- Analyst

So that repayment, that $4.7 million, I mean that is going to get back out -- starting 1Q '21?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

You would not expect another $4.6 million in 4Q 2021, that's right, because there will not be $4.6 million of deferred rent that at that time. As we said earlier, there is about $2 million that will be deferred out of the first quarter that we expect to collect some time during 2021, but it's not $4.6 million.

John Massocca -- Ladenburg Thalmann -- Analyst

So if I think about the relative impact though from 4Q '20 to 1Q '21, is that $6 million or so of rent and given what they paid in 4Q and given what they're not going to pay in 1Q and the fact, this is all cash?

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Yes, that's correct. You would lose $4.6 million that you collected in the fourth quarter plus their normal rents, that was in the fourth quarter, you would not expect to see it all in the first quarter, other than and other $1 million or $2 million for March..

John Massocca -- Ladenburg Thalmann -- Analyst

Okay. That's it for me. Thank you all very much.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you.

Operator

[Operator Instructions] Our next question is from John DeCree with Union Gaming. Please proceed.

John DeCree -- Union Gaming -- Analyst

Good morning everyone, thanks for taking my question.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Good morning.

John DeCree -- Union Gaming -- Analyst

Peter, I think in an earlier comment comment, you've mentioned that a lot of folks have kind of come by and taking a peek at Tropicana, but really not serious buyers or perusing [Phonetic]. I'm curious if you're seeing that on the sell side as well for stuff that you're looking at? Are there really motivated sellers or are people just kind of putting sign out hoping that they catch lofty price and aren't particularly motivated?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, look at, by the way, this is the correct one point on the, the folks that are looking at Trop. It's not that they had serious buyers, they just don't have serious catch, that's the difference. I think they are quite serious about wanting the asset, just not on terms that we're willing to accept. So look, there is not a whole lot of stuff falling off the trees in the gaming world right now, not surprising. There are some things that we look at. Look, we've got some -- we had a great year last year in a year that we wouldn't have imagine would be the case. There are things we're looking at, but you got to dig and scratch. It's, I mean it's as I'd like to say, there's not a lot of the easy pickings. When I started in this business and it was in 1994 and formed Penn National Gaming out of a little racetrack in Harrisburg, Pennsylvania.

There were companies galore all over the place because it was the early days in the in the river boat business as you know and companies left and right, and we swept up a lot of them. In fact, between we own, if not most of the good ones in the Penn portfolio, many of them for sure in the regional world, those aren't out there in those numbers. So you're seeing a lot of one-off opportunities, but it's all timing. There are people who have assets, single assets that we'd love to have in our portfolio, but until they're really ready or have a need or state reasons, all you can do is really kind of hang close.

Our former CFO, Bill Clifford used to have a line, I kind of like it a lot and so I quote him and credit him and that is this, a guy is riding down the road and he rides by your house, he looks at the window and says, wow, that is a beautiful looking house and he goes jumps, pulls this call over the curb, he runs up to the front door, bags on the door and come to the door and he says, you've got a beautiful house and I really want to have it, and you say, but it's not for sale and he says but you don't get it, I really want it and you go through these again, it's not for sale. Well may be, if I had a little iteration with back and forth for a while, there is a price, which you read into the back room and brag your keys and say, here it is.

But, by and large, it's all a matter of timing and our job is to stay close to opportunity to reset that moment when it may appear. And also frankly to cultivate that people who say we want to work with Penn or with GLPI because those guys have their act together, they can do tough complex multi-company transactions etc. etc. So that's kind of the way we look at it. It's not like these deals -- well, take a look at last year, how many deals got signed, besides what we did, not much. So you got to make, you got to fight for, you got to scratch for it every day. I'm not going to be over dramatic, but that's pretty well characterizes what we are charged with doing.

John DeCree -- Union Gaming -- Analyst

Understood. That's helpful. Peter. If I can ask one more, Matt, I think it was earlier you've mentioned that a lot of the folks that are looking at Tropicana are considering a redevelopment plan. So, I just wanted to confirm that comment. And then my question is, of the folks that seems to be most interested. Are you seeing interest from Casino companies -- traditional casino companies, is it financial sponsors, third party real estate developers like we've seen perhaps within end the strip get involved before just kind of curious where you're seeing the most interest?

Matthew Demchyk -- Senior Vice President of Investments

Yeah. So I'll take the second part first and the answer is all of the above, and we've got a diverse set of interest from folks from a lot of different specialties and the key thing, I'd point out is you've got 35.1 acres that are some of the most strategic acres on the strip right now that are prime for redevelopment. And what the Coke folks are doing and what we'll see happen on the strip over the next decade, really this is an important piece of that. And so, yes, everybody is looking at redevelopment. I mean there is so much underutilized acreage there and there is so much upside of the operations from taking more market share. I think everyone is think about how to make it most relevant for the upcoming decade or two. And as you see the benefits of the Raiders field not far away and that into the strip coming to life, I think you're going to see something really interesting happen there and we've been privy to some of the -- what the plans might look like and they're all interesting and compelling.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, look it's likely a multi-use development as you would imagine from residential, retail the whole enhanced Casino etc. etc. So it's the kind of folks who would do that, that are most serious about this opportunity.

John DeCree -- Union Gaming -- Analyst

Got it. Thanks so much for all the color and thanks again.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you. How we are doing time-wise. We have time for one or two more questions.

Operator

We have one more left which is Robin Farley with UBS. Please proceed.

Robin Farley -- UBS -- Analyst

Great, thanks for fitting me in. Most of my questions have been answered, but just going back to your earlier comment about potential transactions, you mentioned the strip and it seemed like it was more than just the trough you were referring to. Is there from buyers and kind of working with you to do something with an existing strip operation, not a redevelopment opportunity, but just more typical of the type of transactions we've done?

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Steve, do you want to take that one?

Steve Ladany -- Senior Vice President, Finance

Certainly. So look, at different points in time, there had been different interested operators and obviously the market has continued to evolve. I think there is -- there are some highly integrated destination resorts that sit on the strip that are at any one point in time being marketed and as we think through those and have discussions with potential operators, we are always interested and willing to look at transactions. Different times we've had different folks that have come forward and we pursue things with them. So yeah, we will look at anything and we constantly talk to current and new potential operators about possible transactions.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Yeah, look, we -- maybe I should make clear, we're not anti-strip. I mean it's some wonderful properties there, just has to be underwritten differently. You've got a whole different cost structure and when those hotels for example are empty and you've got a enormous cost drag and so forth, it's not, let's say, a property in Toledo, Ohio, where you don't even have a hotel, cost structure is so entirely different and the ability to make money is so much simpler, it's just more complex. So, we're up for anything and we would do anything, but you just have a different view of how you put it together.

Robin Farley -- UBS -- Analyst

Okay, great, thank you very much.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Thank you, Robin.

Operator

That does conclude our question and answer session. I would like to turn the call back over to management for closing remarks.

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Operator, thank you very much and thank you all for dialing in today. As we said, last year was a was surprisingly successful year for us. We're charging ahead in 2021, hoping we get through COVID and get out the other side. So we're optimistic about this year and look forward to talking with you next quarter. Thanks again.

Operator

[Operator Closing Remarks]

Duration: 59 minutes

Call participants:

Joseph Jaffoni -- Investor Relations

Peter M. Carlino -- Chairman of the Board and Chief Executive Officer

Desiree A. Burke -- Senior Vice President, Chief Accounting Officer

Matthew Demchyk -- Senior Vice President of Investments

Steve Ladany -- Senior Vice President, Finance

Brandon J. Moore -- Senior Vice President, General Counsel & Secretary

Barry Jonas -- Truist Securities -- Analyst

Greg McGinniss -- Scotiabank -- Analyst

Jay Kornreich -- SMBC -- Analyst

Daniel Adam -- Loop Capital -- Analyst

Thomas Allen -- Morgan Stanley -- Analyst

David Katz -- Jefferies -- Analyst

RJ Milligan -- Raymond James. -- Analyst

Shaun Kelley -- Bank of America -- Analyst

David Gallagher -- Green Street -- Analyst

John Massocca -- Ladenburg Thalmann -- Analyst

John DeCree -- Union Gaming -- Analyst

Robin Farley -- UBS -- Analyst

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