NEW YORK--(BUSINESS WIRE)--VICI Properties Inc. (NYSE: VICI) (“VICI Properties” or the “Company”) announced today that, in connection with the Eastern Band of Cherokee Indians’ (“EBCI”) agreement to acquire the operations of Caesars Southern Indiana from Caesars Entertainment, Inc. (NYSE: CZR) (“Caesars”), the Company has agreed to enter into a triple-net lease agreement with EBCI with respect to the real property associated with Caesars Southern Indiana. In addition, as part of this transaction, the parties have agreed to negotiate a right of first refusal (“ROFR”) for VICI Properties on the real property associated with the development of a new casino resort in Danville, Virginia.
Initial total annual rent under the lease with EBCI will be $32.5 million and the rent coverage ratio in the first year after closing is expected to be above 2.2x. The lease will have an initial term of 15 years, with four 5-year tenant renewal options. The tenant’s obligations under the lease will be guaranteed by EBCI.
Annual base rent payments under the Company’s Regional Master Lease with Caesars will be reduced by $32.5 million upon completion of EBCI’s acquisition of the operations of Caesars Southern Indiana and the execution of the lease between EBCI and VICI. The property is expected to retain the Caesars brand name and to continue to be a part of the Caesars Rewards loyalty program per the terms of a licensing agreement negotiated between EBCI and Caesars.
John Payne, President and Chief Operating Officer of VICI Properties, said, “This transaction provides additional tenant diversification and continues to build VICI’s embedded growth pipeline while allowing Caesars to further their strategic objectives in Indiana. After only 3 years of real estate investment management, VICI has the most tenants of any gaming REIT. We’re thrilled to welcome EBCI as our sixth gaming tenant and look forward to a long partnership as they expand into commercial gaming.”
Richard Sneed, Principal Chief of the EBCI, said, “We have been operating in partnership with Caesars for over 20 years at our Harrah’s Cherokee Casino Resort and Harrah’s Cherokee Valley River properties and are excited to form a relationship with VICI as we begin to expand our gaming portfolio outside of North Carolina.”
The transactions referenced herein are subject to customary regulatory and other approvals (and, with respect to the ROFR, negotiation of definitive documentation and applicable regulatory and other governmental approvals) and are expected to be completed in the third quarter of 2021.
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 28 gaming facilities comprising 47 million square feet and features approximately 18,000 hotel rooms and more than 200 restaurants, bars and nightclubs. Its properties are leased to industry leading gaming and hospitality operators, including Caesars, Century Casinos, Hard Rock International, JACK Entertainment and Penn National Gaming. VICI Properties also has an investment in the Chelsea Piers, New York facility and 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.
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 “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. Such risks and uncertainties include, but are not limited to: the impact of changes in general economic conditions, including low consumer confidence, unemployment levels, and depressed real estate pricing resulting from the severity and duration of any downturn in the U.S. or global economy (including stemming from the public health emergency caused by COVID-19 and changes in economic conditions as a result of the public health emergency caused by COVID-19); risks that the pending transaction may not be consummated on the terms or timeframes contemplated, or at all; the ability of the parties to satisfy the conditions set forth in the definitive transaction documents, including the ability to receive, or delays in obtaining, the governmental and regulatory approvals and consents required to consummate the pending transaction, or other delays or impediments to completing this transaction; the ability of the applicable parties to obtain the financing necessary to complete the transactions on the terms expected or at all; disruptions to the real property and operations of the subject property during the pendency of the closing of the pending transactions; and risks that the Company may not achieve the benefits contemplated by the pending transaction (including any expected accretion or the amount of any future rent payments). Important risk 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 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.