NEW YORK--(BUSINESS WIRE)--VICI Properties Inc. (NYSE:VICI), an experiential real estate investment trust, today announced that it has, together with a subsidiary of Hard Rock International entered into definitive agreements to acquire the JACK Cincinnati Casino, located in downtown Cincinnati, Ohio, for an aggregate purchase price of approximately $745 million in cash. Pursuant to the agreements, VICI Properties will acquire 100% of the membership interests of a subsidiary of JACK Cincinnati that owns the land and real estate assets of JACK Cincinnati for $558 million, and Hard Rock will acquire the operating assets of JACK Cincinnati for $187 million.
Simultaneous with the closing of this transaction, the Company will enter into a triple-net lease agreement with Hard Rock related to JACK Cincinnati. The lease will have an initial total annual rent of $42.75 million, for an implied capitalization rate of 7.7%, and an initial term of 15 years, with four 5-year renewal options. The rent coverage ratio in the first year after closing is expected to be approximately 1.74x and the tenant’s obligations under the lease will be guaranteed by Seminole Hard Rock Entertainment, Inc., which maintains an investment grade rating from S&P Global Ratings and Fitch Ratings.
“We are proud to partner with Hard Rock, further diversifying our tenant roster with an international leader in gaming, entertainment and hospitality experiences, and a renowned global platform of 245 hospitality venues across 75 countries,” said John Payne, President and Chief Operating Officer of VICI Properties. “This transaction expands our geographic footprint into one of the fastest growing regional markets. As one of only four full-scale casinos permitted in Ohio, the property is poised to benefit from the introduction of Hard Rock, a dynamic and proven operator in the Ohio market. We look forward to supporting Hard Rock as they continue to execute on their growth strategy throughout the U.S. and globally.”
Opened in March 2013, JACK Cincinnati is situated on 22 acres in the Broadway Commons area of downtown Cincinnati. The property features 100,000 square feet of gaming space with approximately 1,800 gaming machines and 100 table games. Additionally, the property contains 33,000 square feet of meeting space, six high-quality restaurants, and two bars.
“Hard Rock has been the number one operator in Ohio since opening in the greater Cleveland market in 2013,” said Jim Allen, chairman and CEO of Hard Rock International. “And now, we look forward to introducing our unique brand of casino entertainment to Cincinnati. On behalf of the 40,000 Hard Rock team members worldwide, I am pleased to welcome the more than 1,000 JACK Cincinnati employees into the Hard Rock family.”
The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in late 2019. The acquisition is expected to be accretive immediately upon closing.
Goldman Sachs & Co. LLC is acting as financial advisor and Kramer Levin Naftalis & Frankel LLP is acting as legal advisor to VICI Properties for the transaction described herein.
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 22 gaming facilities comprising over 39 million square feet and features approximately 14,800 hotel rooms and more than 150 restaurants, bars and nightclubs. Its properties are leased to industry leading gaming and hospitality operators, including Caesars Entertainment Corporation and Penn National Gaming. VICI Properties also 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.
