VICI Properties Inc. to Acquire the Venetian Resort’s Real Estate in Las Vegas
VICI Properties Inc. (NYSE: VICI) (“VICI Properties” or the “Company”) announced today it has entered into definitive agreements to acquire from Las Vegas Sands Corp. (NYSE: LVS) (“LVS”) all of the land and real estate assets associated with the Venetian Resort Las Vegas and the Sands Expo and Convention Center, located in Las Vegas, Nevada (collectively, the “Venetian Resort”), for $4.0 billion in cash, representing a 6.25% cap rate. An affiliate of certain funds managed by affiliates of Apollo Global Management, Inc. (the “Apollo Funds”), has agreed to acquire the operating company of the Venetian Resort for $2.25 billion, subject to customary closing conditions, of which $1.2 billion is in the form of a secured term loan from LVS and the remainder is payable in cash.
Simultaneous with the closing of the transaction, the Company will enter into a triple-net lease agreement for the Venetian Resort with an affiliate of the Apollo Funds. The lease will have an initial total annual rent of $250.0 million and an initial term of 30 years, with two ten-year tenant renewal options. LVS has agreed to provide lease payment support designed to guarantee the Venetian Resort’s rent obligations under the lease through 2023, with early termination of such lease payment support if the Venetian Resort achieves a certain financial milestone or a tenant change of control occurs. Rent under the lease will escalate at the greater of 2.0% or CPI (subject to a 3.0% ceiling), beginning the earlier of lease year three or when the Venetian Resort achieves certain financial milestones. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to be completed by year end 2021. The Company intends to fund the transaction through a combination of cash on hand, equity and long-term debt financing.
Ed Pitoniak, Chief Executive Officer of VICI Properties, said, “In envisioning and building the Venetian Resort, Sheldon Adelson stands among the great American place-makers of the last 100 years. There are few assets in American commercial real estate that deserve to be called monumental, but the Venetian Resort is truly monumental in both its spatial grandeur and in its economics. Upon closing of the transaction, VICI will be honored to help steward the legacy of what Mr. Adelson and the Las Vegas Sands team, led by Rob Goldstein and Patrick Dumont, have built.”
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