Caesars spinoff VICI lands big real estate deal on the Vegas Strip

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A major casino owner has completed its acquisition of real estate spinoffs from MGM Resorts International, giving the buyer several other hotel properties on the Strip.

Caesars Entertainment spin-off VICI Properties said on April 29 that it had completed its $17.2 billion buyout of MGM Growth Properties, the Las Vegas Review-Journal reported. The deal was first announced last August and included the assumption of approximately $5.7 billion in debt.

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As part of the sale, VICI acquired several properties operated by MGM Resorts along Las Vegas Boulevard, including Mandalay Bay, MGM Grand, The Mirage, Park MGM, New York-New York, Luxor and Excalibur.

Caesars Palace in Las Vegas. (LE Baskow/Las Vegas Review-Journal via AP)

He also acquired several other casino properties outside of Nevada, including MGM Grand Detroit and MGM National Harbor near Washington, DC.

In total, VICI is expected to receive more than $1 billion in initial annual rent from newly acquired properties, the company said.

The takeover is unlikely to result in any notable changes to the resorts anytime soon, as VICI does not operate the properties but rather collects rents from the companies that do.

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Still, it easily ranks among the biggest real estate sales the Strip has ever seen and significantly expands VICI’s holdings in the famous casino corridor, making the New York company one of the biggest landowners on Las Vegas. Boulevard.

VICI now owns 10 resorts on the Strip totaling nearly 41,000 hotel rooms, 1.2 million square feet of casino space and 5.9 million square feet of meeting and convention space, a said the company’s president and chief operating officer, John Payne, in a press release.

Caesars Entertainment spin-off VICI Properties said on April 29, 2022 that it had completed its $17.2 billion buyout of MGM Growth Properties. (Benjamin Hager/Las Vegas Review-Journal via AP, FGile)

Company CEO Ed Pitoniak said the deal makes VICI the largest owner of hotels and conference hotels in America.

MGM Resorts, which created MGM Growth in 2016 and was its majority shareholder, received about $4.4 billion in cash as part of the VICI takeover, according to a company press release.

Operations at properties managed by MGM Resorts, now owned by VICI “will continue as before for guests and employees,” MGM spokesman Brian Ahern told the Review-Journal.

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MGM will use proceeds from the deal to invest in its “core business,” chairman and chief executive Bill Hornbuckle said in a May 2 earnings call, adding that the company would also “continue to pursue opportunities.” significant growth”.

FILE – A plane takes off from Harry Reid International Airport near the casinos on the Las Vegas Strip. (AP Photo/John Locher, File) ((AP Photo/John Locher, File)/AP Newsroom)

MGM has announced that it is offering $607 million to buy LeoVegas, a Swedish online gaming company. He is also in the process of buying the operating side of The Cosmopolitan of Las Vegas for over $1.6 billion; will start spending on a new resort in Osaka, Japan later this year; and plans to build a 1,000-room resort in the United Arab Emirates.

VICI was spun off from Caesars Entertainment in 2017 when the casino chain’s main operating unit emerged from bankruptcy. By the end of that year, VICI’s real estate holdings on the Strip consisted of Caesars Palace and Harrah’s, a securities depository.

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VICI was already building its portfolio on Las Vegas Boulevard before the MGM Growth takeover was unveiled.

Casino operator Las Vegas Sands Corp. announced in March 2021 that it was selling its properties on the Strip – The Venetian, Palazzo and the former Sands Expo and Convention Center – for approximately $6.25 billion to VICI and investment giant Apollo Global Management.

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As part of the transaction, which closed in February, VICI acquired the property for $4 billion. Apollo acquired the operations side for $2.25 billion and leased the former Sands sites to VICI.

Since its inception, VICI has completed approximately $29.5 billion in mergers and acquisitions and other investment activity, General Counsel Samantha Sacks Gallagher said in a recent press release.

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