Catalyst Capital’s Gateway closes $500M plus property deal with Mesirow Financial

Mesirow Financial has closed previously announced sale-leaseback for three Gateway Casinos & Entertainment Limited properties located in the Greater Vancouver Regional District.

The three acquired properties include the Grand Villa Casino Burnaby, Starlight Casino New Westminster and Cascades Casino Langley.

Gateway, a portfolio company of Catalyst Capital Group, is one of the largest and most diversified gaming and entertainment companies in Canada.

Under the agreement, Mesirow Realty Sale-Leaseback, Inc. (MRSL), the net-lease real estate investment arm of Mesirow Financial, will now become the landlord for the three properties for a purchase price in excess of C$500 million. Certain of Gateway’s wholly owned subsidiaries have entered into long term leases for each of the properties and will continue to operate the casinos under the leases, offering the same exceptional customer experience with no expected changes to employees or operations at these locations.

Led by Senior Managing Directors Garry Cohen and Douglas Barker, Mesirow Financial’s Sale-Leaseback Capital group arranged for the purchase of the three Gateway flagship properties.

The acquisition financing was structured in collaboration with Mesirow Financial’s Credit Tenant Lease (CTL) and Structured Debt group led by Senior Managing Directors Stephen Jacobson and Nathaniel Sager, as well as its Institutional Sales and Trading division.

MRSL was principally represented by its law firm, Goldberg Kohn of Chicago, as well as by its local British Columbia and Canadian counsel, Boughton Law Corporation. Four Corners Advisors and David Solano served as the buyer’s advisors on the transaction.

“This traditional real estate transaction unlocks significant value and generates cash which the company will use to reduce debt, invest in Gateway’s growth, support new developments and job creation, and deliver value to our stakeholders,” said Gabriel de Alba, Gateway’s Executive Chairman.

Mesirow Financial’s Garry Cohen, stated, “after having closed more than $1.5 Billion USD in sale-leaseback transactions in the last two years, we are excited to have closed on Mesirow Realty Sale-Leaseback’s first cross-border transaction monetizing these three exceptional and strategic assets. We look forward to partnering and forging new relationships with both Gateway and The Catalyst Capital Group, Gateway’s private equity sponsor.”

“This transaction once again signifies the strong collaboration between our capital markets businesses. We continue to enhance our full-service platform in acquiring single-tenant properties, now internationally, complemented by our strong capabilities in debt placement,” said Dominick Mondi, President of Mesirow Financial and of its Capital Markets division.

Bennett Jones LLP and Latham & Watkins LLP served as legal counsel to Gateway. Colliers International, Capital Markets Group, also advised Gateway on the transaction.

photo credit: Gateway

Ted Liu

Ted Liu, M.Sc. (Mining), MBA (Finance), is the Editor of Private Capital Journal and CanadaMetals.ca, and former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA). Ted was the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, the most sophisticated and advanced all private capital and public market financing database.