– Adds 15 Marquee Assets Expanding Real Estate
Portfolio to 43 Class-A Properties –
– Increases Annual Rent by Over $1.0 Billion
–
– Diversifies Tenant Base to Eight
Best-In-Class Operators –
– Closes on $5.0 Billion of Investment Grade
Senior Unsecured Notes –
– Settles the Exchange Offer and Consent
Solicitation for Notes Originally Issued by MGP –
VICI Properties Inc. (NYSE: VICI) (“VICI,” “VICI Properties” or
the “Company”), an experiential real estate investment trust, today
announced it has closed on the previously announced acquisition of
MGM Growth Properties LLC (NYSE: MGP) ("MGP"). Upon completion of
the merger, VICI will have an estimated enterprise value of
approximately $44.0 billion, firmly solidifying VICI’s position as
the largest experiential net lease REIT while also advancing VICI’s
strategic goals of portfolio enhancement and diversification.
Simultaneous with the closing of the MGP acquisition, the
Company entered into an amended and restated triple-net master
lease with MGM Resorts International (NYSE: MGM) (“MGM Resorts” or
“MGM”). The MGM master lease, which commences as of today, has an
initial term of 25 years, with three 10-year tenant renewal options
and an initial total annual rent of $860.0 million. Rent under the
MGM master lease escalates at a rate of 2.0% per annum for the
first 10 years and thereafter at the greater of 2.0% per annum or
the annual increase in the consumer price index ("CPI"), subject to
a 3.0% cap. Additionally, the Company retained MGP’s 50.1%
ownership stake in the joint venture between MGP and Blackstone
Real Estate Income Trust, Inc. ("BREIT JV"), which owns the real
estate assets of MGM Grand Las Vegas and Mandalay Bay. The BREIT JV
lease remained unchanged and provides for current annual base rent
of approximately $303.8 million, of which approximately $152.2
million is attributable to our investment in the BREIT JV, and an
initial term of 30 years, with two 10-year tenant renewal options.
Rent under the BREIT JV lease escalates at a rate of 2.0% per annum
for the first 15 years and thereafter at the greater of 2.0% per
annum or the annual increase in CPI, subject to a 3.0% cap. On a
combined basis, the MGM master lease and BREIT JV lease will
deliver initial attributable annual rent to us of approximately
$1,012.2 million. The tenant’s obligations under the MGM master
lease and BREIT JV lease continue to be guaranteed by MGM.
Key Comments
- Transformative Impact on VICI Portfolio & Economic
Scale—Edward Pitoniak, VICI Chief Executive Officer: “The
addition of the MGP portfolio, together with the recent closing of
our Venetian acquisition, elevates VICI to the top ranks of
American 4-wall REITs, making VICI a Top-5 REIT by EBITDA and a
Top-10 REIT by enterprise value. We also become the largest owner
of hotel and conference real estate in America, within what we
believe is the superior transparency and integrity of the Triple
Net Lease model. Moreover, among Top 10 American 4-wall REITs, VICI
stands out for the Class A quality of our real estate. The VICI
team has accomplished a total of $21 billion in closings in the
last two months with the lowest G&A cost structure of any of
the Top 10 REITS by enterprise value. The productivity of the VICI
Team is unmatched.”
- The New MGM – VICI Partnership—Bill Hornbuckle, Chief
Executive Officer & President of MGM Resorts International:
“The team at VICI has worked collaboratively with MGM to help us
unlock significant value from the underlying real estate of our
assets. We look forward to continuing our long-term partnership
with VICI.”
- Quality of the MGP Portfolio, MGM Operating Excellence, VICI
Leadership on the Las Vegas Strip—John Payne, VICI President
& Chief Operating Officer: “We are excited to grow our
portfolio with the acquisition of 15 of the highest quality Las
Vegas and Regional assets in American gaming as well as continue to
diversify our tenant base with one of the foremost gaming and
entertainment companies in the world, MGM Resorts. VICI now owns
ten premier resorts on the Las Vegas Strip, consisting of 1.2
million square feet of gaming space, approximately 40,775 hotel
rooms and 5.9 million square feet of meeting and convention space.
We continue to believe in the strength of the Las Vegas market,
bolstered by a strong post-COVID recovery and robust operator
outlook and continued institutionalization of this real estate
asset class.”
- Transformative Impact on VICI Balance Sheet & Access to
Capital—David Kieske, VICI Executive Vice President & Chief
Financial Officer: “Since announcing the MGP transaction, VICI
executed the largest REIT common only equity offering ever, repaid
all of our outstanding secured debt and achieved an investment
grade rating from S&P and Fitch, enabling us to fund the cash
portion of this transaction with our $5.0 billion senior notes
offering, the largest ever investment grade REIT offering. This is
a transformational step in the evolution of our balance sheet
management and provides our Company with another source of
efficient unsecured long-term capital, further positioning VICI and
our best-in-class balance sheet to capitalize on future growth
opportunities.”
- VICI’s Ability to Execute Transformative
M&A—Samantha Sacks Gallagher, VICI Executive Vice President
& General Counsel: “During the past four and a half years since
formation, VICI has completed approximately $29.5 billion of
M&A and other investment activity, demonstrating our ability to
execute on complex transactions and achieve our strategic and
growth objectives. With the closing of the MGP acquisition, the
VICI Team has further cemented its capability as the partner of
choice to finance and execute transformative transactions.”
Financing
Under the terms of the MGP Master Transaction Agreement, MGP
stockholders received 1.366 shares of the Company's newly issued
common stock in exchange for each Class A common share of MGP,
resulting in the Company issuing approximately 214.5 million
shares.
MGM received $43.00 per unit in cash for the redemption of the
majority of its MGP OP units, which were converted into units of
VICI Properties OP LLC, the Company's new operating partnership
("VICI OP"), in connection with the closing of the MGP acquisition,
for total cash consideration of $4.404 billion. MGM retained
approximately 12.2 million VICI OP units following the closing of
the MGP acquisition. The MGP Class B share that was held by MGM was
cancelled and ceased to exist.
Following the MGP acquisition, the Company has approximately
963.0 million shares of common stock outstanding, representing
98.7% of total outstanding VICI OP units.
The Company also announced today, in connection with the closing
of the MGP acquisition, that its subsidiary, VICI Properties L.P.,
has closed on its public offering of $5.0 billion in aggregate
principal amount of senior unsecured notes. The Company used a
portion of the net proceeds of the offering to fund the
consideration for the redemption of a majority of MGM's outstanding
MGP OP units, which were converted into VICI OP units received by
MGM in connection with the closing of the MGP acquisition.
The Company also issued approximately $4.1 billion aggregate
principal amount of senior notes in exchange for, and with the same
interest rate, maturity date and redemption terms as, notes
originally issued by MGP OP pursuant to the settlement of the
exchange offers and consent solicitations. Following the settlement
of the exchange offers and consent solicitations, approximately
$0.1 billion of the MGP OP notes remain outstanding.
Advisors
Morgan Stanley & Co LLC served as lead strategic and
financial advisor to VICI Properties on the transaction. Citigroup
Global Markets Inc. also acted as financial advisor to VICI
Properties. Hogan Lovells US LLP and Kramer Levin Naftalis &
Frankel LLP served as legal advisors to VICI Properties.
About VICI Properties
VICI Properties Inc. is an experiential real estate investment
trust that owns one of the largest portfolios of market-leading
gaming, hospitality and entertainment destinations, including
Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las
Vegas, three of the most iconic entertainment facilities on the Las
Vegas Strip. Following the closing of the MGP acquisition on April
29, 2022, VICI Properties’ national, geographically diverse
portfolio consists of 43 gaming facilities comprising over 122
million square feet and features approximately 58,700 hotel rooms
and more than 450 restaurants, bars, nightclubs and sportsbooks.
Its properties are leased to industry leading gaming and
hospitality operators, including Caesars Entertainment, Inc.,
Century Casinos, Inc., the Eastern Band of Cherokee Indians, Hard
Rock International Inc., JACK Entertainment LLC, MGM Resorts
International, Penn National Gaming, Inc., and The Venetian Las
Vegas. VICI Properties also has an investment in the Chelsea Piers,
New York facility and owns four championship golf courses and 34
acres of undeveloped and underdeveloped 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.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. You can identify these
statements by our use of the words “assumes,” “believes,”
“estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,”
and similar expressions that do not relate to historical matters.
All statements other than statements of historical fact are
forward-looking statements. You should exercise caution in
interpreting and relying on forward-looking statements because they
involve known and unknown risks, uncertainties, and other factors
which are, in some cases, beyond the Company’s control and could
materially affect actual results, performance, or achievements.
Important risk factors that may affect the Company’s business,
results of operations and financial position (including those
stemming from the COVID-19 pandemic and changes in the economic
conditions as a result thereof and risks relating to the Company’s
pending transactions) are detailed from time to time in the
Company’s filings with the Securities and Exchange Commission. The
Company does not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as may be required by
applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20220429005444/en/
Investor Contacts: Investors@viciproperties.com (646)
949-4631
Or
David Kieske EVP, Chief Financial Officer
DKieske@viciproperties.com
Danny Valoy Vice President, Finance
DValoy@viciproperties.com
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