VICI Properties Completes Acquisition of Octavius Tower at Caesars Palace Las Vegas for $507.5 Million
VICI Properties Inc. (NYSE:VICI) (together with its affiliates, “VICI
Properties” or the “Company”), an experiential real estate investment
trust (“REIT”), has announced it has completed the acquisition for the
previously announced transaction with Caesars Entertainment Corporation
(NASDAQ:CZR) (“Caesars Entertainment” or “Caesars”) to acquire, and
lease back, all of the land and real estate assets associated with the
Octavius Tower at Caesars Palace for $507.5 million. The Company funded
the purchase of Octavius Tower using available cash. Caesars has
operated, and will continue to operate, Octavius Tower pursuant to the
terms of an existing ground lease until such time as the Caesars Palace
Las Vegas lease is amended to incorporate the Octavius Tower ground
lease, which will happen concurrently with the closing of Harrah's
Philadelphia (as discussed herein). The annual rent payment to the
Company for the Octavius Tower will be $35 million.
The acquisition of Octavius Tower represents the consummation of a
portion of the transactions contemplated and detailed in the previously
announced Letter of Intent (“LOI”) entered into on May 8, 2018 by and
between the Company and Caesars. On July 11, 2018, VICI Properties and
Caesars entered into a definitive agreement with respect to the other
transactions contemplated by the LOI, including the acquisition of all
of the land and real estate assets associated with Harrah's Philadelphia
for $241.5 million, which will be reduced by $159 million to reflect
the aggregate net present value of the contemplated modifications to
certain of the Company's leases with Caesars, resulting in cash
consideration of $82.5 million. The acquisition of Harrah's Philadelphia
and the entry into the contemplated modifications to the lease
agreements are expected to close during the fourth quarter of 2018.
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