VICI Properties, a prominent experiential real estate investment trust with a growing portfolio of entertainment, gaming, and hospitality venues, has announced the acquisition of four gaming properties in Canada from PURE Canadian Gaming Corp. The acquisition, priced at Can$ 271.9m ($200.8 million), will add multiple properties in Alberta to VICI Properties’ real estate portfolio. It includes PURE Casino Yellowhead and PURE Casino Edmonton in Edmonton, Alberta, as well as PURE Casino Calgary in Calgary, Alberta, and PURE Casino Lethbridge in Lethbridge, Alberta. The acquisition was financed by VICI Properties using a combination of cash and drawing down funds under its existing revolving credit facility in Canadian dollars.
This acquisition is a significant milestone for VICI Properties as it represents the company’s first international investment, allowing it to diversify its tenant roster. John Payne, the president and COO of VICI Properties, commented that the transaction highlights the company’s ability to source, structure, and fund cross-border transactions, thus expanding its opportunity set as it continues its growth trajectory. Furthermore, VICI Properties signed a triple-net master lease agreement with PURE regarding the PURE Portfolio, featuring approximately Can$ 21.8m ($16.1m) in annual rent.
VICI Properties owns one of the largest portfolios of venues within the hospitality, gaming, and entertainment vertical, including a number of high-profile locations on the Las Vegas Strip. Its portfolio comprises 49 gaming venues around the US and Canada. With the acquisition of these four properties in Canada, VICI Properties will continue to expand its portfolio and diversify its real estate assets. The company’s president and COO expressed enthusiasm for the new partnership with PURE, VICI Properties’ eleventh tenant, and its future prospects.
Vici is a company primarily focused on owning casinos, which are extensive establishments comprising of gaming facilities, hotels, and retail stores. However, it cannot be denied that there is a lack of diversity in its business, as the hotel and retail aspects of the properties are not very attractive to potential tenants without the gaming aspect. Casinos are typically highly regulated and are only allowed in a limited number of regions, although this number is gradually increasing.
The main area of diversity that Vici offers is between regional and destination casinos. For instance, Las Vegas alone accounts for approximately 45% of the rent roll. However, it is worth noting that the number of potential casino operator tenants is limited. Vici has only 11 tenants, despite owning 50 properties.