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Gaming and Leisure Properties Inc (GLPI) Q1 2021 Earnings Call Transcript

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Gaming and Leisure Properties Inc (NASDAQ: GLPI)
Q1 2021 Earnings Call
Apr 30, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Gaming and Leisure Properties, Inc,, First Quarter 2021 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to introduce your host, Joe Jaffoni, Investor Relations. Thank you. You may begin.

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Joseph Jaffoni -- Investor Relations

Thank you, Doug, and good morning everyone, and thank you for joining Gaming and Leisure Properties First Quarter 2021 Earnings Call and Webcast. The press release distributed yesterday afternoon is available on the Investor Relations section of the company's 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 first quarter 10-Q and in the earnings release as well as the 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. Also joining today's call are 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, Chief Investment Officer.

With that, it's my pleasure to turn the call over to Peter, Peter Carlino. Peter, please go ahead.

Peter Carlino -- Chairman and Chief Executive Officer

Well, thank you, Joe, and good morning everyone. Thank you for joining us this morning.

We are of course pleased to announce another strong and I think eventful quarter. Notably, we have continued to diversify our tenant roster with the significant addition of multiple transactions with Bally's, part of which includes a 50-year ground lease on the Tropicana property, and just want to note that kind of brings full circle our, pretty, I think, bold and decisive choice to provide a liquidity to Penn National back in a very, very dark hour. The result for them and clearly for us as well has been evident. There are many other significant events that we've highlighted in our press release. There is a lot are detailed here. As always, it's all there, if you want to take a look at it. And we're here of course with our team to answer your questions.

Obviously too, we had a strong financial performance this quarter, and let me ask Desiree Burke to go through just some numbers that she'd like to highlight.

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

Thanks, Peter. Good morning all. Our first quarter results were strong, and we are ahead of the first quarter 2020 on several metrics, primarily the variable items in our business.

To summarize our first quarter REIT segment, our rental income increased by $7.1 million compared to the quarter a year ago. That's primarily related to non-cash rent adjustments of $9.5 million, higher percentage rent from our Penn Master Lease of $3.2 million relating to the higher monthly results. Morgantown rent of $750,000 relating to the lease that we had with Penn that became effective in the fourth quarter of 2020. Those items were partially offset by lower percentage rent of $2.1 million on our amended Pinnacle lease, the Boyd lease and Meadows lease. Lower cash rental income from Caesars of $700,000. As you might recall, we entered into an amendment with them in July of last year, which provides for fixed escalation in the future. Lower rental income from Casino Queen, which is related to our deferred rent agreement with them and their temporary closure during the quarter. We do expect this amount to be collected upon closing of our Hollywood Casino Baton Rouge transaction with Casino Queen, which is expected in the latter half of this year. The REIT segment also benefited from lower interest expense this quarter due to the refinancing activities which we occurred in 2020.

And then lastly our TRS had strong performance with net revenues and adjusted EBITDA exceeding the prior year by $10.9 million in revenue and $6.8 million in EBITDA. Consistent with the theme that we're seeing across all regional gaming, spend per visitation, it continues to be strong and we began to experience an increase in visitation throughout the quarter as well. So we have spent up as well as for visitation, which is a very positive sign for our TRS operations.

With that brief summary, I will turn it back to Peter.

Peter Carlino -- Chairman and Chief Executive Officer

Thanks, Desiree, very much. Matt, you wanted to highlight some broad issues just to put the company and our efforts in perspective of this quarter.

Matthew Demchyk -- Senior Vice President of Investments

Sure. Yeah, and a few thoughts. The first thing, if you look at the $150 million of acquisitions we just did and the transaction we did last year with Bally's and you really consider their master lease construct, a credit-worthy operator and a very solid four-wall coverage based on our underwriting, they arguably represent some of the best risk adjusted cash flows in all of commercial real estate. Both deals had aspects that were off market, that are reflective of GLPI's unique skill set, not just bidding in auctions, but creating and originating transactions. We compete on capabilities, not just cost to capital. These transactions make that clear.

As we continue our efforts to facilitate and originate transactions, we remain committed to our balance sheet with optimal leverage for our business plan that maintain significant liquidity, and more broadly to Peter's point, as we move forward, given the still very significant yield spread between our assets and the market level of interest rates, and even more proven track record of operating resilience, we heard on some of the operator call so far this quarter, at the underlying properties, the case study is still in play, and the case for cap rate compression in multiple expansion remains very strong.

With that, I'll give it back to Peter.

Peter Carlino -- Chairman and Chief Executive Officer

Thanks, Matt. That's very helpful. And with that, I expect to hear from others, but let's open the floor, operator, for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Barry Jonas with Truist. Please proceed with your question.

Barry Jonas -- Truist -- Analyst

Hi, thanks for that. Maybe I'd like to start with Tropicana. Can you give any more color on the process? How deep was interest in the end? Do you think you maximized proceeds or the relationship with Bally's, an equally important factor? Thanks.

Peter Carlino -- Chairman and Chief Executive Officer

Well, let me take take a shot at that. The relationship with Bally's is very important and that probably was a driving part of this. We have a lot of interest in the range, without saying too much, in the range of what we had invested. Maybe we could have made a couple of dollars, but I think we took a long view here to create an earning asset, after all, that's the business we're in. We got a significant cash payment upfront and a long-term deal with a decent yield and also solidify our connection to Bally's in this and other things that we're looking at and doing. Anybody else at the table want to add? Steve, are you?

Steve Ladany -- Senior Vice President, Finance

No, I think everything you said, Peter, is correct. Look, I think the ability for us to convert an asset that was non-income producing into income producing and the ability to use the $150 million as a offset to the additional acquisitions we're doing in Black Hawk and Rock Island, I think were very beneficial for us in our story going forward.

Peter Carlino -- Chairman and Chief Executive Officer

Thanks.

Barry Jonas -- Truist -- Analyst

That's great. And then just as a follow-up question, I'm curious to get your thoughts on the recent realty income acquisition of a REIT and see if there are any takeaways for you, especially as you think about consolidation at some point in the gaming REIT space potentially?

Peter Carlino -- Chairman and Chief Executive Officer

Matt, can you take a whack at that.

Matthew Demchyk -- Senior Vice President of Investments

Yeah, I mean, I'd just say big picture, Barry, I think the certain key factors in all triple-net M&A and it's really initial accretion, its future growth impact, its diversification of the portfolio, and the impact of a larger denominator on the company. And in the realty income deal and all the feedback I've heard, the overarching positive was the 10% AFFO accretion that they shared and the countervailing point was, just a question around how denominator that large is going to impact the growth going forward. And without any specifics to our sector, I mean, I think those themes are applicable. I think the accretion piece and the impact on future growth piece are what they are. Diversification is a little different because realty income was a lot more diversified when it started. So I don't know if they gained a lot there. Our companies are much less diversified. So you could take that for what it is. And then the impact of the denominator also as relevant maybe more because there is a limited finite number of properties in this space. So, I think that's how I would read the tea leaves there and leave the conclusions to you.

Barry Jonas -- Truist -- Analyst

Great. Thank you so much, guys. Appreciate it.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Todd Thomas with KeyBanc Capital Markets. Please proceed with your question.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Hi, thanks, good morning. Well, first question, I guess, following up on asset pricing. Matt, you touched on cap rate compression in your opening comments. Are you seeing price pressures or competition beginning to drive down cap rate? And from a competitive standpoint, are you seeing new capital go up on the real estate side?

Matthew Demchyk -- Senior Vice President of Investments

Yeah. I think it's a little early to call exactly where spot is, because there's not that many moving pieces in real time. We haven't seen three or four transaction close. I'd say what we did was certainly an off-market deal in every aspects. I wouldn't take our cap rate as market. I mean, I would suggest to you that it is favorable to where the market might be. We'll have to see where price discovery is. And I'd also say, every one of these deals there's a lot of nuances and we're very focused on credit quality of the operator, the construct we get, and it's hard to kind of look at it all apples-to-apples because there's nuances. But I do think if you look at the valuations of the public companies, if you look at the one for capital to get exposure to higher yields back to the cap rate compression point, over time I'd expect there to be some compression, and our hope is and our strategy is to find opportunities to get excess return from our efforts. So not to be bound by this kind of headwind in the transactions that we do. So, I think we'll see how it plays out this year. I think the stage is set for a positive backdrop in that regard. And we'll just have to wait and see how it plays out.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay. And then, I was wondering if there was an update on the timing of the sales of the TRS operations and the closing of the initial Bally's transactions?

Peter Carlino -- Chairman and Chief Executive Officer

Brandon, why don't you take that.

Brandon J. Moore -- Gaming and Leisure Properties Inc -- Senior Vice President, General Counsel & Secretary

Yeah, I mean similarly, there is really no update on that, and what we've said publicly is still where I think we are in the second half of this year. And I don't see anything to change that at the present time, whether it's early in the second half or later in the second half, will depend on the regulatory process. Both of those are in full swing. And I think, we will know much more next quarter than what we know this quarter.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah, I mean, candidly, we can't get ahead of that process and we owe it to the folks that we work with, our regulators to be patient, get it done, and they have kind of set the time. So, but I think as Brandon indicated, we stand by our previous suggestion of when they will probably occur.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay, got it. Are those the two primary factors around not providing guidance at this point, and should we expect to see some additional guidance visibility once those transactions close?

Peter Carlino -- Chairman and Chief Executive Officer

Go ahead, Steve, you want to take that.

Steve Ladany -- Senior Vice President, Finance

Yeah, Todd. I think the answer is yes. With seven assets currently either being divested or acquired, it is very difficult for us to provide guidance, because the timing aspect of all these transaction is so critical to what will ultimately be the annual performance here. So I think you're right. That's the main overarching issue for us to provide anything that would be accurate to the marketplace.

Peter Carlino -- Chairman and Chief Executive Officer

It looks like, it's all good. I mean, we're going to get there with these transactions, but we can only be wrong in trying to estimate when and how they're going to occur. So, we just feel that whatever we said would be misleading one way or the other. Now that will smooth out at the end of this year as we get into next year and we may well then get back to guidance.

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Okay. Thank you.

Operator

Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Cassandra Lee -- Jefferies

Hi, this is Cassandra asking on behalf of David. Can you come back to the Bally's transaction for a second and just give us a little more on the rationale there. Is there a ground lease instead of triple-net lease on property, service deal. Can you just give me more details there.

Peter Carlino -- Chairman and Chief Executive Officer

Who wants to take that.

Steve Ladany -- Senior Vice President, Finance

Yeah. I can jump in. With respect to the Tropicana side of the transaction, yes, it's a ground lease in effect that we are going to only own the land pro forma for the transaction. Part of the long-term thoughts is as Bally's indicated in their press release was they will look at redevelopment opportunities in the future and I think it was important that for them that they have the ability to make changes to the overall capital improvements that sit on top of the land today. So I think that was part of the thought process there. It will be triple-net, and that we have no carry costs associated with the property. We'll just collect our rent on the land.

Cassandra Lee -- Jefferies

Alright, that's helpful. And with respect to like the right of first refusal in several markets that Bally's hold, can you talk about the rationale between like balancing using equity or debt to finance such acquisitions or financing providing to that?

Matthew Demchyk -- Senior Vice President of Investments

Yeah, I mean as the year plays out, I'll go back to that commitment to having balance sheet in the optimal place. We've historically said the guidepost for that are 5 to 5.5 times debt-to-EBITDA and as the year plays out, I think we're going to get some more visibility on the likelihood of some of the transactions coming to pass. I'll just remind you we have in our tool chest the same tools we had historically. We've got an ATM program. We've also got retained cash flow that at our size is actually a decent number that could help fund things too. As we move forward, our intention on anything we're going to do incrementally is to at least appropriately balance the debt and the equity and that means to have -- that's not going to lever the company.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah, I think that's the best answer. We're committed to that and as Matt well outlined, so you can always assume, we're going to stay in that range, period.

Cassandra Lee -- Jefferies

Alright, thank you very much.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Nick Yulico with Scotiabank. Please proceed with your question.

Nick Yulico -- Scotiabank -- Analyst

Thanks. Good morning, everyone. In terms of -- a couple of questions on Bally's, can you tell us what is the outstanding obligation to Bally's on the $500 million commitment for the Gamesys transaction? It's not clear also whether the Black Hawk and Rock Island sale leaseback transaction would satisfy part of that obligation.

Steve Ladany -- Senior Vice President, Finance

Sure. So as you'd imagine, we would love to fund the commitment in exchange for $500 million worth of sale leaseback acquisitions with Bally's. However, historically Bally's has demonstrated an ability to efficiently fund transactions using various forms of capital. I'd point out that and remind you that the outstanding commitment is reduced by any incremental equity be raised above $850 million between the time of our agreement and closing of the Gamesys transaction, and we've already raised $745 million. So we're cautiously optimistic that some portion of the sale leaseback financing may occur.

Nick Yulico -- Scotiabank -- Analyst

Okay. And are you able to select which assets satisfy the sale leaseback obligation or is that at Bally's discretion?

Peter Carlino -- Chairman and Chief Executive Officer

That's mutually, the language that...

Steve Ladany -- Senior Vice President, Finance

That's a mutual agreement between us and Bally's.

Nick Yulico -- Scotiabank -- Analyst

Okay. Thanks. I guess just one other question is on rent coverage which is 1.3, which is below the typical 1.8 escalator coverage Governor, given the recent occupancy cap restrictions that are lifted in certain jurisdictions, could you provide some insight into the potential trajectory of improving rent coverage?

Peter Carlino -- Chairman and Chief Executive Officer

Hang on.

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

Yeah, so are you referring to the table where we report the prior quarter rent coverage on page 14 of our release?

Nick Yulico -- Scotiabank -- Analyst

Yes.

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

Okay. So obviously each of our tenants have been impacted by COVID in prior quarters and that is a trailing 12-month number, and we expect those numbers to continue to improve as we sell the properties, have continue to open up and have had fairly strong performance that's what we've seen other operators report to-date. So those numbers are important point in time and trailing 12 months that did include closed periods.

Peter Carlino -- Chairman and Chief Executive Officer

Yes, I'd like to say, certainly, it's hard to count the zero, zero revenue or limited revenue is just that. So no, we are not at all concerned about coverage, and we expect it''s going to move very swiftly back to a place that we're more comfortable and in line for increases.

Matthew Demchyk -- Senior Vice President of Investments

And then you can take a look at some of the results we've seen at least Bally's report. I mean, there was certainly some robustness in the time period since the numbers in here, we're just -- we're not giving any guidance on the timeline of when we expect that to eclipse our threshold, but we're hopeful to see it in the not terribly distant future.

Nick Yulico -- Scotiabank -- Analyst

Okay. Thanks everyone.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you. Thanks, Nick

Operator

Our next question comes from the line of Jay Kornreich with SMBC. Please proceed with your question.

Jay Kornreich -- SMBC -- Analyst

Hey, thank you. Good morning.

Peter Carlino -- Chairman and Chief Executive Officer

Good morning.

Jay Kornreich -- SMBC -- Analyst

As, Bally's has been quite equivocally raised, how do you think about value from 7 year rule for opportunities in the 4 states, I know Bally's previously had a bid for Virginia casino development for that they might be interested in Downstate New York full scale casino that gets legalized. So just curious of your overall big picture view on the potential here.

Steve Ladany -- Senior Vice President, Finance

Sure, I'll give it a shot, but obviously we can't speak for Bally's intentions of any project. But yes, it's probably reported obviously that they were knocked out of the Richmond bid process. Look, I think the way we landed at the row for in those four jurisdictions was predominantly based on the fact that we believed and they believed, those are four jurisdictions where ultimately online sports betting and iGaming will be very important to a company that's trying to put together an omnichannel strategy. And therefore, whether or not they achieved the acquisition of a property in the next 12 months or in year six of the ROFR. I think we want to be able to have a seat at the table to work with them, because as you did point out, they have been acquisitive. They are aggressive, and we would like to be their partners in any transaction, whether that's a development project or a existing casino property. So that was the thought behind that process.

Jay Kornreich -- SMBC -- Analyst

Okay. That makes sense. And then just one follow-up as the tenant conversation has largely shifted away from your largest tenant, Penn National Gaming. Do you foresee any further desire for them to grow and access new states with you as a partner or is the right way to think about external growth with your operators like Bally's or the ROFR on the Casino Queen with...

Peter Carlino -- Chairman and Chief Executive Officer

Yeah, I mean I think the answer is we want to do business with every one of our tenants, and we stay as close as possible to each of them to be a good and a positive partner for the things that they may wish to do. How it would shake out in a particular deal of state or an opportunity, I can't predict, but obviously, we spent a lot of time thinking about how we can be a good partner to our existing tenants, period. Happens at the moment the Bally's is highly acquisitive, they've proven to be really good guys to work with, honest, easy, it's been kind of fun. So we're going to go with where the river is flowing so, and that could be with any one of our existing tenants.

Jay Kornreich -- SMBC -- Analyst

Okay. I appreciate it. Thanks very much.

Operator

Our next question comes from the line of Smedes Rose with Citi. Please proceed with your question.

Smedes Rose -- Citi

Hi, thanks. I just wanted to ask you, there is kind of a lot of media stories about Native Americans moving into commercial gaming particularly with a couple of assets in Las Vegas now, do you see that as a potential avenue to develop new tenants or is that of less interest to you?

Peter Carlino -- Chairman and Chief Executive Officer

No, well commercial, it's commercial, that's a terrific opportunity and we want to be a part of that anywhere in any place we can with any responsible well capitalized group. Absolutely.

Matthew Demchyk -- Senior Vice President of Investments

Amen that. Our strategy, if you look back historically, we've talked about it on the travel reservations is a little hard to structure appropriately for our structure, but anything they do off-campus effectively with projects that are on traditional sale, leasebacks with us, I mean, we'd love to do it with the right balance sheet, the right credit and some of them have a lot of cash flow they'd like to grow it. So it's certainly a part of the conversation here. It has been, frankly.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah.

Smedes Rose -- Citi

Yeah. And do you, I mean do you feel like this is an avenue that more Native American tribes will pursue going forward for whatever reasons. It just seems like there's been a little bit of that -- I mean, if some of them have been in it for a while, but just...

Peter Carlino -- Chairman and Chief Executive Officer

Yes. I mean, I think...

Smedes Rose -- Citi

I think it would be like a big new thing over the next few years.

Peter Carlino -- Chairman and Chief Executive Officer

I mean, the caution is Smedes that they have a lot of cash sitting around what do you do with it, right, I mean people with good situation with that problem around the world and they know that business, and I know they upside from that business, so this is very unique compared to other things you could put your cash into. So I'd expect there to be more of it.

Steve Ladany -- Senior Vice President, Finance

Yeah. And I'd echo that and include the fact that there is a number of jurisdictions, which historically have not had gaming, Nebraska, Alabama, which are now starting to move toward it. So as you have cash flow and you're sitting on a wonderful asset that's performing but do you have sudden competition possibly coming in around you, you're going to look to diversify and I think that's something we're going to continue to see. And I think you're right, I think we'll continue to see things happen in Vegas, maybe not on the strip, maybe off strip, but I think we'll continue to see activity there.

Smedes Rose -- Citi

Okay. Thanks. And then just maybe a comment, I mean, I don't know if you're taking a vote on this, but there is only three gaming REITs. I think you have your call concurrent with one of the others is, you should probably like reach out to your peers in this space and figure out a way to have calls at separate times, just a comment for taking for what it's worth.

Peter Carlino -- Chairman and Chief Executive Officer

Smedes, that's a fair comment. They came in after we did and I think some of them came in to my office and said can we move-out. I said, yeah, let them move, I'm not being cute, but yes, it's unfortunate, we agree. So we';re on the same page, no malice there, it's just the way it kind of worked out.

Smedes Rose -- Citi

Okay.

Operator

[Operator Instructions] Our next question comes from the line of Tim Barrett with Bank of America. Please proceed with your question.

Tim Barrett -- Bank of America -- Analyst

Hey, thanks for taking the question, I want a little bit more broadly just as we've seen some new states legalize online sports betting and the license system is kind of untethered from land based casinos to a certain extent. It will just be great to or hear your thoughts on kind of how that's going to affect the transaction market going forward and maybe your own growth plans.

Peter Carlino -- Chairman and Chief Executive Officer

Well, look, I mean the part of the answer is, we don't really know. But you know most of these states are tethered to bricks and mortar, there are some that aren't and there is some ongoing debate in various states. I know talking to one of our major tenants, they are very focused on bricks and mortar, they are completely focused on that and are building out facilities at some considerable cost to capitalize on that opportunity. So I don't think the script has been written yet. There are some states. You're right, it could open it to the world, it's possible, but I think on balance, look, people are social animals. I'll take the point that, I'll make the point that, you might place occasional bet from home or from your car or from a parking lot some place, but by and large on a Saturday afternoon football's gone and suddenly football activity, people are going to want to be with other people and enjoying a drink and get the whole social experience. So I think what's going to happen is, you're going to see a huge lift in gaming in the United States generally. I'm not sure that's good from a public policy point of view, but I think that's what's going to happen, you're going to see numbers rise everywhere.

Steve Ladany -- Senior Vice President, Finance

Yes Tim, and I'll point something out, I mean, you used the word tethered and one piece of that is practically for us just having state structure it, but the reality is if you look at Penn's public comments. The value of a customer that uses multiple pieces of their omnichannel platform, whether it's iGaming, sports betting and the bricks and mortar is inherently multiple times more profitable. So there is a business incentive for our operators to have both pieces in their delivery platform. And at the end of the day, foreign assets are essential than getting customers that are reliable and predictable and give them more profitability. So I think when we look back, we're going to get many positives that come from COVID, we're getting this case study that we're getting, and on the growth front, I don't that it could be very different, because those economic incentives are going to be there regardless of how the state structure things.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah, I think, I will add one deferring comment just around your M&A question. I do think that it could be a little different, and that if you can now go, it would be one of 60 online license holders in Maryland. You don't maybe then feel the need to go acquire an asset there. I think that's the surface understanding of it, but I think what the reality is, is there are owners of assets in states which have had massive price appreciation, tied to the assumption that those states will tie their license back to a property. And if those things don't happen, those valuations move aggressively. So if you take New York, for example, and look at an asset there, the assumption that all that was going to be tied to a property and it suddenly appears that it might not be, will massively swing at what the perception is of value for a particular asset. So I actually think we're going to see M&A come out of this, and it's going to be the opposite direction than what everyone's thinking. It's going to be people that were holding out with hopes that they were going to get this massive part of gold and now all of a sudden people can access the market a different way and now they realize that maybe they should be a seller anyway.

Tim Barrett -- Bank of America -- Analyst

Great, that's super helpful color. Really appreciate that, and then I guess one other question from me just on the M&A market. I understand the transactions, you guys have done in the last few months have been generally a bit more off market, but it would be great to hear kind of your sense about what the buyer pool for assets looks like. In pre-COVID there is a big talk about increasing institutionalization with private equity, which has been quite active on the operational side so far post-COVID but just it'd great to see kind of growth you guys are seeing out there in terms of deals.

Peter Carlino -- Chairman and Chief Executive Officer

Matt, why don't you take a look at that.

Matthew Demchyk -- Senior Vice President of Investments

Yeah, I think that it's the usual suspects, I mean, we certainly see them and I think on the margin, there is a little sniffing around from some folks on the private equity side. But remember, it's not that easy. I mean, a lot of these states, you need to be licensed. There's a lot of regulatory dynamics involved and it's not for the sane art, and that has given us historically an economic moat to extend better risk-adjusted returns. So we'll see how that plays out, but you're right on the path toward institutionalization, it's inevitable that other folks get involved. And on the other side, and you can look at the Venetian deal, I mean Apollo is, they're not in the real estate but as an operator. So there is also a case that some of that capital finds its way into the operating side and uses someone like us, which might actually be helpful to us. We'll have to wait and see.

Tim Barrett -- Bank of America -- Analyst

Great, thank you guys. Congrats on another great quarter. That's it from me.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Haendel St. Juste with Mizuho. Please proceed with your question.

Haendel St Juste -- Mizuho Securities -- Analyst

Hey, good morning. Thank you for taking my questions. So first one is a follow-up on Bally's transaction. I don't think you're in agreement that GLPI would use it's line of credit to fund the backstop, so I'm curious, I guess better yet, help me understand your thoughts around the balance sheet strategy that 5 to 5.5 and a half times leverage range you outlined, how did that play into how you structured the deal? And any concern at all with your ability to put that financing back up to you within what I think is 3 days? Thanks.

Steve Ladany -- Senior Vice President, Finance

Sure. So a two part question there. First, I think, look, we have -- we had significant amount of time between now and when any transaction would be closing on the Gamesys and I think there is a lot of things which could happen between now and then, which could impact the total amount of the commitment. So I think that we're committed, as Matt said earlier, to the leverage point. If down the line we find ourselves acquiring additional assets, we will of course look to use different avenues that are available to us such as the ATM, for example, to go ahead and make sure we stay within our leverage parameters. With respect to the 3 days notice, I'm just going to say my personal belief is we will have significantly more heads up as to whether or not that commitment would be needed to ultimately fund the transaction well in advance of 3 days before closing. So again, I think we have what looks to be sometime in 6 to 9 months to watch this play out. Then, I think we'll know more information as we go and significantly more information next quarterly call.

Haendel St Juste -- Mizuho Securities -- Analyst

Got it, got it, alright. Thank you for that. And then I got a question on the guidance. Why still no guidance, can you share something from why you're not giving guidance, I know there's a lot of other reasons, I know there is technically equal reason of greater uncertainty that have provided guidance, so curious on that. I totally understand the challenge that the unique times present here, but curious when we can expect guidance? And then maybe as part of that, what's the latest with the CFO search? Thank you.

Matthew Demchyk -- Senior Vice President of Investments

Well, I'll just reiterate the comment from earlier around the guidance. I think the main overlying factor that's driving the fact that we're not providing guidance right now is that we have seven assets that are -- we have three divestitures and we have four acquisitions that are pending, pending regulatory approval and timing TBD. So, I think that's been the main item that's caused us to have hesitation around providing guidance, because without knowing the timing, we're definitely not going to get the number right. I'll let Peter answer the rest of it.

Peter Carlino -- Chairman and Chief Executive Officer

And the CFO search, it's really for the moment, not searching. Look, I think you can see pretty evidently from this quarter, last quarter, I mean, we have no need for someone in that capacity today. Will we eventually fill it, yeah, I think we're going to see how things shape out. We've got a great team here. All bases are covered completely, utterly, perfectly. And we'll just have to see how it evolves, but I think ultimately down the road, you will see us filling that slot, but there is no active search going right now, just because all bases are covered.

Haendel St Juste -- Mizuho Securities -- Analyst

So a question on the guidance. Any thoughts on perhaps providing a range with perhaps at the high end to contemplate instead of -- versus at the bottom end would contemplate another. Anything into that.

Matthew Demchyk -- Senior Vice President of Investments

I think it's virtually impossible for us to achieve that with all the moving pieces because if there were one or two moving pieces, we clearly could try to make an estimate on the low end based on timing in the high-end. When you have seven moving targets, I think that should come up with a meaningful way. It would be very, very difficult. I think the range would probably be so large that it would not be a meaningful number for there.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah, timing is everything in these transactions. Obviously, there's a lot of money involved on a monthly basis and we can't guess. I mean, we can estimate it to take a swag at what it might be, but we've talked about it ad nauseam with the Board and with this team sitting right here today. And we've decided that there are so many variables that it's just -- we can't be right, and don't feel comfortable putting it out there.

Now, as I said earlier today, we may well get through a lot of this stuff, be back in a position where we can feel comfortable once again, and if that seems to make sense at that time, then we'll do it. I mean we understand the interest, but right now, we think it's not serving us, certainly not serving our shareholders well to put out a number that we can't offer with confidence.

Haendel St Juste -- Mizuho Securities -- Analyst

Alright. Thank you for the thoughts.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

Robin Farley -- UBS -- Analyst

Thanks. Most of my questions have been asked. I guess, I was just curious if you have thoughts on Venetian sale price and kind of what you think about valuations in the Vegas market from here forward, and obviously that was done at a time with a little more uncertainty, but just curious of your thoughts on that.

Peter Carlino -- Chairman and Chief Executive Officer

Hi, Robin. Matt, it sounds like your question. So why not...

Matthew Demchyk -- Senior Vice President of Investments

Sure. So firstly, Robin, we think the valuations in the Vegas market given the risk associated with the cash flows are far less attractive than what we got in the deals that we did, and we would underscore the benefits that we got the deals that we got. More broadly, I mean I think it reflects the cap rate compression we've talked about, I think if you look at their lease structure, the escalators and IRR construct, it certainly helped drive the pricing in a way that puts a good mark out there for our entire asset class. And I think we'll watch as things transpire and see where things place going forward.

Robin Farley -- UBS -- Analyst

Okay, great. Thank you.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of John Massocca with Ladenburg Thalmann. Please proceed with your question.

John Massocca -- Ladenburg Thalmann -- Analyst

Maybe just following up on the last question with kind of a broader lens. I mean, it seems like if you would take Venetian transaction, maybe some of the deals that that GLPI has done has a pretty wide gap, and I know you're deals aren't necessarily market but just broadly speaking, there's a pretty wide gap between kind of cap rate on regional assets and Las Vegas assets at this point. And I mean I guess, what do you think needs to happen for some kind of convergence to occur on those cap rates, if it will kind of ever occur?

Matthew Demchyk -- Senior Vice President of Investments

Yeah. I mean I think we're seeing a lot of that right now. I mean, we talked about it in the last call too. Look at the underlying, operating cash flows, look at the resiliency and look at the credit worthiness of our tenants, and you'll see if you look at the stock prices of our whole public company asset class, they've all moved neatly upward in this environment, and if you look at, and it was talked about historically other asset classes like self-storage, manufactured housing, data centers go down the list, it took a while and it was a slow process, but it was methodical and it was pretty consistent over time. And we've seen the beginnings of that. We do not think we're past middle innings of this cap rate compression.

The merits of our cash flow compared to especially the fixed income market, I mean, if you took our assets, got rid of them, and just created bonds out of our cash flows, they would trade well better than where our companies are and where the assets are valued. And on top of that, we have real estate as collateral. That's mission critical to state budgets. It's operationally essential to the operators. When you put those facts in front of people, it's a learning curve. I think there is a price discovery piece that comes from the private side, I mean, we've talked about that historically too. As the public market gives one form of price discovery, if there are transactions in the private market that come from private equity or other sources or anything we might do, whether it be a joint venture or something else to give us positive mark for the asset class. There's really no transactions that take place that represent the value of a 1920 asset master lease with a credit-worthy counter-party like Penn. And we hope folks like you help make the case as we move forward, because it's pretty obvious when you look at the resiliency where the cash flow should trade, but there is a time element involved. It's always been that way and we are methodically moving forward on that trajectory.

Peter Carlino -- Chairman and Chief Executive Officer

Yeah. Look, I'll say flatly the cash flow coming out of regional properties is more valuable than the cash flow in the strip, period. I'd say, it's just it. That's the story we've been telling, we will continue to tell, the facts bear it out without a doubt. But look, people like glitz and the market is the market. We can't affect that except say if you really care about reliability and certainty, you really want to be in a regional market, you risk too less. You want to have a 4,000-room hotel when things are tough or do you want to have none, and have a strip on facility like some we've built in Ohio, Toledo, Columbus. I think we're way better off by any measure, and if you cared about return on investment, would you put your money on the strip or would you out it in one of these regional markets. Pretty simple, I don't like but, and we did and have. So look, it's an anomaly. I understand, I mean you drive up to the Bellagio with, we're in, it's pretty exciting. People do that, but don't be seduced by pretty pictures. And if you care about quality, you really want to be looking at the regional markets. That's our story. That's what we believe will eventually prevail.

Matthew Demchyk -- Senior Vice President of Investments

Yeah, and quality to us, John, is cash flow quality. The one thing I'd point out is the coverage rates in both of these markets. I mean, look at the coverage on the last deal that went away from us on the strip and look at the coverage that we were able to achieve on the assets that we buy, and not only do you get a better cap rate, you have something that's operationally essential and mission critical in the states. You also get coverage that's in excess. Especially, when you stress it well above one, you can look back at the deal we did. Two deals ago, it was Bally's last year, it was called Twin River. And if you take the trailing 4-wall coverage for the trailing 12 months and include all the closures that we talked about all those years, Peter pointed out, even some negative numbers, our coverage was done in excess of 1.4 times there. And at the end of the day, that's called the margin of safety and that helps us sleep at night, and that's our value proposition to our shareholders, the bond market, appreciates it. I mean, despite historically being a little more leverage than our peers with the best cost of debt because the folks are looking at the underlying risk profile of the cash flows when I give those rates to our company and it's inevitable over time that the equity market will continue to appreciate it as we deliver results and clip the coupon and send the dividends to shareholders and do what we said we were going to do.

Peter Carlino -- Chairman and Chief Executive Officer

Thanks, Matt.

John Massocca -- Ladenburg Thalmann -- Analyst

Okay. And then we're sticking with that theme of kind of regional performance and maybe on a more specific kind of level. How should we think about the cadence of the Ohio portion of the 10 percentage rent in coming quarters? I understand it's down to kind of individual property performance, but I guess, how strong are the comps that these are going to be based on quarter-to-quarter at this point?

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

Well, the one thing I will tell you with Toledo, don't forget that we have a floor. So that is pretty much fixed at that rate. So I don't think it can go higher clearly, but it can go lower. So the only one that's really variable there to go any lower would be Columbus, and as we've seen and as these properties continue to open up, we expect continued good performance, not the closures that we had seen in the trailing 12 months.

John Massocca -- Ladenburg Thalmann -- Analyst

Okay. And as a reminder, the comps are based on prior month or is it based on year-over-year basis?

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

When you say the comps, so the percentage rent is based on net revenue incurred within the period.

John Massocca -- Ladenburg Thalmann -- Analyst

Okay. Yeah, I was thinking of that quarter-to-quarter. It'd just be for this quarter versus the prior quarter, I guess, would be kind of the way to maybe think about it, based on the reported numbers.

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

That's right. The reported numbers that I discussed, those are $3.2 million, be it was first quarter of 2021 versus first quarter of 2020.

John Massocca -- Ladenburg Thalmann -- Analyst

Perfect, that's it from me. Thank you very much.

Peter Carlino -- Chairman and Chief Executive Officer

Thank you.

Operator

Our next question comes from the line of Steve Pizella with Deutsche Bank. Please proceed with your question.

Steve Pizella -- Deutsche Bank -- Analyst

Hey, good morning guys. Thanks for taking our question. Given cost have reduced as heavily as they have been for operators and as such acquisition related synergies are probably harder to justify, do you guys expect the M&A environment to remain as active as it has been?

Peter Carlino -- Chairman and Chief Executive Officer

Go ahead, Steve.

Steve Ladany -- Senior Vice President, Finance

Yeah, I do. I think that the synergy aspect was certainly important a few years ago when Eldorado acquired Isle and Eldorado acquired Tropicana. I think that at this point, I think it was large scale M&A deals where one operator is buying 10, 12, 15 assets from another operator and is able to garner a massive corporate expense synergy. I think those deals are few and far between going forward just because the landscape in the gaming operator world is pretty set. There are just not a lot of those Isle, Trop type size companies that are still left. So I do think that synergy piece will be less important. The asset quality, asset type filling out your omnichannel, I think those are the things that people are looking at. In talking with operators, they're focused on the type of asset. I think they are being a little more selective at this point as far as what asset they're buying, in what market, but I don't think synergies are going to slow down the M&A environment.

Steve Pizella -- Deutsche Bank -- Analyst

Okay. Great. Thank you.

Operator

There are no further questions in queue. I'd like to hand the call back over to Mr. Carlino for closing remarks.

Peter Carlino -- Chairman and Chief Executive Officer

Well, thank you very much and thanks to all who dialed in this morning. It's been fun to talk with you and we'll look forward to hopefully another strong quarter next time around. So see you then. Thank you.

Operator

[Operator Closing Remarks]

Duration: 48 minutes

Call participants:

Joseph Jaffoni -- Investor Relations

Peter Carlino -- Chairman 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

Barry Jonas -- Truist -- Analyst

Todd Thomas -- KeyBanc Capital Markets -- Analyst

Brandon J. Moore -- Gaming and Leisure Properties Inc -- Senior Vice President, General Counsel & Secretary

Cassandra Lee -- Jefferies

Nick Yulico -- Scotiabank -- Analyst

Jay Kornreich -- SMBC -- Analyst

Smedes Rose -- Citi

Tim Barrett -- Bank of America -- Analyst

Haendel St Juste -- Mizuho Securities -- Analyst

Robin Farley -- UBS -- Analyst

John Massocca -- Ladenburg Thalmann -- Analyst

Steve Pizella -- Deutsche Bank -- Analyst

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