VICI Properties in $3.2 Billion Transaction with Eldorado Resorts

VICI Properties Inc. (NYSE: VICI) said June 24 that it has agreed to pay approximately $3.2 billion to purchase three assets from Eldorado Resorts, Inc., in connection with Eldorado’s proposed acquisition of Caesars Entertainment Corp., and to modify existing lease agreements on the properties.

VICI will acquire all the land and real estate assets associated with Harrah’s New Orleans, Harrah’s Laughlin, and Harrah’s Atlantic City. The properties will be added to an existing master lease and will have an initial annual rent of approximately $154 million.

Ed Pitoniak, CEO of VICI, said the transaction will replenish the REIT’s pipeline of growth opportunities for “years to come.”

“We are significantly enhancing the quality, security, and term of our leases with our main tenant. Longer term, we are restocking a pipeline of growth opportunities that will allow us to continue to grow well into the future,” he said.

Separately, Pitoniak recently joined Nareit in New York for a video interview at REITweek: 2019 Investor Conference.

Pitoniak discussed how VICI’s efforts to achieve tenant diversification set it apart from the rest of the gaming sector. He also noted that he does not expect any let-up in the current pace of transactions.

“We continue to be excited about the opportunities we’re looking at and really don’t see that pace slowing down anytime soon,” he said.

Meanwhile, Pitoniak said investor understanding of the gaming real estate sector has clearly improved. He noted that dedicated REIT investors have begun to understand how to compare the industry with other asset classes and are aware that the underlying revenue of the sector is resilient through all cycles, while the supply/demand balance is healthy.

“We’ve gone very quickly to being a core REIT holding on the part of the dedicated REIT community,” he said.