VICI Properties Inc. Completes Property Acquisitions and Lease Modifications Related to the Eldorado-Caesars Merger
20 Luglio 2020 - 10:15PM
Business Wire
– Acquires $253 million of Annual Rent –
– Completes Acquisition of Three Regional
Properties and Related Lease Modifications –
VICI Properties Inc. (NYSE: VICI) (“VICI Properties” or the
“Company”), an experiential real estate investment trust, today
announced it has completed the transactions contemplated in the
Master Transaction Agreement announced on June 24, 2019 with
Caesars Entertainment, Inc. (“Caesars,” formerly known as Eldorado
Resorts, Inc. or “Eldorado”) in connection with Eldorado’s
acquisition of Caesars Entertainment Corporation. Per the terms of
the Master Transaction Agreement, VICI Properties has acquired the
land and real estate assets associated with Harrah’s New Orleans,
Harrah’s Laughlin, and Harrah’s Atlantic City and modified certain
provisions of the existing Caesars lease agreements for total
consideration of approximately $3.2 billion in cash. A summary of
the key items completed in accordance with the terms of the Master
Transaction Agreement are as follows:
- VICI Properties acquired all of the land and real estate assets
associated with Harrah’s New Orleans, Harrah’s Laughlin, and
Harrah’s Atlantic City (collectively, the “Properties”) for an
aggregate purchase price of approximately $1.8 billion. The
Properties were added to the Non-CPLV Lease, which has been amended
and renamed the “Regional Master Lease,” and annual rent under the
Regional Master Lease has increased by $154.0 million;
- The CPLV Lease Agreement and HLV Lease Agreement have been
amended and combined into a single master lease agreement, referred
to as the “Las Vegas Master Lease.” In exchange for aggregate
consideration of approximately $1.4 billion, annual rent under the
Las Vegas Master Lease has increased by $98.5 million;
- All rent coverage floors under the Caesars leases have been
eliminated;
- All existing Caesars leases now reflect a uniform parent
guarantee from the parent entity of the newly combined company,
Caesars Entertainment, Inc.;
- All existing Caesars leases have been extended such that a full
15-year initial lease term remains prior to expiration of the
initial base lease term;
- VICI Properties and Caesars have entered into a put-call
agreement, whereby the Company has a call right to acquire, and
Caesars has a put right to require that the Company acquire, the
land and real estate assets associated with Harrah’s Hoosier Park
and Indiana Grand, subject to regulatory approval. The purchase
price related to the put option from Caesars is determined by an
8.0% capitalization rate (or 12.5x the initial annual rent). The
purchase price related to the call option is determined by a 7.7%
capitalization rate (or 13.0x the initial annual rent). The initial
annual rent for the assets would be the amount that causes the
ratio of EBITDAR of the property to the initial property lease rent
to equal 1.3x and the assets will be added to the Regional Master
Lease. The put-call agreement may be exercised by either party
between January 1, 2022 and December 31, 2024;
- VICI Properties has been granted rights of first refusal for
whole asset sale or sale-leaseback transactions on two Las Vegas
Strip properties, and a right of first refusal for a sale-leaseback
transaction on Horseshoe Casino Baltimore, in the event Caesars
elects to sell these properties. The first Las Vegas Strip property
will be selected among the following: Flamingo Las Vegas, Bally’s
Las Vegas, Paris Las Vegas and Planet Hollywood Resort &
Casino, with the second property to be one of the previous four
plus the LINQ Hotel & Casino.
John Payne, President and Chief Operating Officer of VICI
Properties, said, “We’re thrilled to complete this transformative
transaction, creating significant and immediate value for our
shareholders while replenishing our embedded pipeline of growth
opportunities for years to come. The new Caesars is the largest
domestic gaming operator in America, with an unrivaled national
footprint and we’re excited to continue our partnership with the
new Caesars management team as they grow Caesars into one of the
strongest entertainment platforms in the world.”
David Kieske, Chief Financial Officer of VICI Properties, said,
“This transaction adds $253 million of annual rent at an attractive
7.8% cap rate, bringing our total annualized rent to approximately
$1.3 billion. Over the past year we’ve demonstrated our disciplined
capital allocation approach by securing our financing needs well in
advance, removing any unanticipated market risk. In June of 2019,
concurrent with the transaction announcement, we locked in the
equity funding by raising equity at a gross issuance price of
$21.50 per share, thereby eliminating market volatility.
Additionally, in February of this year, we completed our
leverage-neutral financing strategy by issuing unsecured notes at a
blended interest rate of 3.8%. Upon completion of these
transactions VICI is among the top triple-net REITs in America as
determined by enterprise value.”
“Since our emergence less than three years ago, VICI has
executed over $8 billion of asset-level transactions and raised
over $6 billion of primary equity,” said Edward Pitoniak, VICI
Chief Executive Officer. “No other American REIT has accomplished
as much in that period of time, and that’s due to a VICI management
team and a VICI Board of Directors that are strategizing and
executing with unmatched energy and conviction.”
Deutsche Bank Securities Inc. acted as financial advisor, Stifel
provided a fairness opinion and Kramer Levin Naftalis & Frankel
LLP and Hogan Lovells US LLP acted as legal advisors to VICI
Properties in connection with the transaction.
The previously and separately announced $400 million mortgage
loan secured by the Caesars Forum Convention Center and the
acquisition of approximately 23 acres of undeveloped Las Vegas land
from Caesars remain subject to completion of due diligence, entry
into definitive documentation, and other customary closing
conditions. The closing of the mortgage loan and the acquisition of
the land are intended to close concurrently and are cross
conditioned.
About VICI Properties
VICI Properties is an experiential real estate investment trust
that owns one of the largest portfolios of market-leading gaming,
hospitality and entertainment destinations, including the
world-renowned Caesars Palace. VICI Properties’ national,
geographically diverse portfolio consists of 31 gaming facilities
comprising over 50 million square feet and features approximately
20,200 hotel rooms and more than 200 restaurants, bars and
nightclubs. Its properties are leased to industry leading gaming
and hospitality operators, including Caesars Entertainment, Inc.,
Century Casinos Inc., Hard Rock International, JACK Entertainment
and Penn National Gaming, Inc. VICI Properties also owns four
championship golf courses and 34 acres of undeveloped land adjacent
to the Las Vegas Strip. VICI Properties’ strategy is to create the
nation’s highest quality and most productive experiential real
estate portfolio. For additional information, please visit
www.viciproperties.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. You can identify these
statements by our use of the words “anticipates”, “assumes,”
“believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,”
“projects,” and similar expressions that do not relate to
historical matters. All statements other than statements of
historical fact are forward-looking statements. You should exercise
caution in interpreting and relying on forward-looking statements
because they involve known and unknown risks, uncertainties, and
other factors which are, in some cases, beyond the Company’s
control and could materially affect actual results, performance, or
achievements. These risks, uncertainties and other factors include,
but are not limited to: the impact of changes in general economic
conditions, including low consumer confidence, unemployment levels
and depressed real estate prices resulting from the severity and
duration of any downturn in the U.S. or global economy (including
stemming from the COVID-19 pandemic and changes in the economic
conditions as a result of the COVID-19 pandemic); the fact that the
Company may not achieve the benefits contemplated by our pending
and recently completed transactions and acquisitions of real estate
assets, including the transactions described herein; risks that not
all potential risks and liabilities have been, or will be,
identified in the Company’s due diligence for our pending and
recently completed transactions, including the transactions
described herein; the fact that the pending transactions described
herein may not be completed on the terms contemplated or at all;
our ability to obtain the financing necessary to complete our
pending transactions on the terms we currently expect or at all;
the possibility that completion of our pending transactions may be
unduly delayed; and the effects of our recently completed
transactions, including the transactions described herein, and the
pending transactions, on us, including the future impact on our
financial condition, financial and operating results, cash flows,
strategy and plans. Important factors that may affect the Company’s
business, results of operations and financial position are detailed
from time to time in the Company’s filings with the U.S. Securities
and Exchange Commission. The Company does not undertake any
obligation to update or revise any forward-looking statement,
whether as a result of new information, future events, or
otherwise, except as may be required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200720005761/en/
Investor Contacts: Investors@viciproperties.com (646)
949-4631 Or David Kieske EVP, Chief Financial Officer
DKieske@viciproperties.com
Danny Valoy Vice President, Finance
DValoy@viciproperties.com
Media Contacts: PR@viciproperties.com (646) 949-4631 Or
ICR Phil Denning and Jason Chudoba Phil.Denning@icrinc.com, (646)
277-1258 Jason.Chudoba@icrinc.com, (646) 277-1249
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