VICI Gets Four Canadian Casinos in $200M Sale-Leaseback

NYC-based VICI Properties, the casino REIT that pulled off the largest casino deal in Las Vegas in 2022, has started 2023 with a deal to acquire a portfolio of four casinos in Canada in a $200M sale-leaseback transaction—the REIT’s first international acquisition.

The four properties were sold by PURE Canadian Gaming Corp., including PURE Casino Edmonton in Edmonton; PURE Casino Yellowhead, also in Edmonton; PURE Casino Calgary in Calgary; and the PURE Casino Lethbridge in Lethbridge.

In a statement announcing the deal, VICI said it financed the acquisition with a combination of cash on hand and by drawing down funds under its existing revolving credit facility.

Simultaneous with the acquisition, VICI entered into a triple-net master lease agreement with PURE covering the portfolio. The master lease has an initial total annual rent of $16M, representing an implied cap rate of 8%, and an initial term of 25 years, with four 5-year tenant renewal options.

“This transaction highlights our ability to source, structure, and fund cross-border transactions, widening our opportunity set as we continue along our growth trajectory,” said John Payne, VICI president, in a statement.

VICI was the majority owner of the MGM Grand Las Vegas and Mandalay Bay hotel-casinos in Las Vegas when it bought out Blackstone’s 49.9% stake in both hotels for $5.5B, the largest hotel-casino trade in 2022.

Blackstone received $1.27B in cash and VICI agreed to assume Blackstone’s share of about $3B in debt in the deal for the two Vegas hotels.

Formed in 2017 as a spin-off from Caesars Entertainment Corp. in 2017 as part of a bankruptcy reorganization, VICI Properties has become one of the largest experiential REITs with growing portfolio of gaming, hospitality and entertainment destinations.

Including the new Canadian acquisitions, VICI’s portfolio consists of 49 gaming facilities across the US and Canada encompassing about 124M SF and hotels encompassing 59,300 rooms as well as more than 450 restaurants, bars, nightclubs and sportsbooks.

Its properties are leased to gaming and hospitality operators, including Caesars Entertainment, Century Casinos, the Eastern Band of Cherokee Indians, Foundation Gaming & Entertainment, Hard Rock International, JACK Entertainment, MGM Resorts International, Penn Entertainment, Inc., PURE Canadian Gaming Corp., and The Venetian Las Vegas.

VICI has a growing array of partnerships with leading non-gaming experiential operators, including Great Wolf Resorts, Cabot, Canyon Ranch and Chelsea Piers. VICI Properties also owns four championship golf courses and 34 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.