VICI Properties Inc. (VICI-N) has announced agreements to acquire the real estate assets of Century Casino & Hotel Edmonton, Century Casino St. Albert, and Century Mile Racetrack and Casino in Edmonton, and Century Downs Racetrack and Casino in Calgary, from Century Casinos, Inc. (CNTY-Q) for $221.7 million in cash.
The portfolio will be added to the existing triple-net master lease agreement between VICI Properties and Century and annual rent will increase by $17.3 million – representing an implied cap rate of 7.8 per cent.
The property-level rent coverage ratio under the Century master lease, adjusted for VICI’s pending acquisition of Rocky Gap Casino Resort and the Century Canadian portfolio, is expected to be approximately 2.0x. (Century is in the process of acquiring the Rocky Gap casino operations in Maryland.)
The Century master lease will also be extended to a 15-year term, with four additional five-year tenant renewal options.
“We are thrilled to announce our third international investment with the acquisition of Century’s four Canadian casino assets, demonstrating our ongoing desire to expand internationally and confidence in the Canadian gaming market,” John Payne, president and chief operating officer of VICI Properties, said in the announcement.
“We are also pleased to continue growing our partnership with Century by supporting their asset monetization strategy, unlocking value that fuels their strategic growth initiatives.”
The four casino properties
The properties comprise:
- Century Casino & Hotel, Edmonton: Six acres, 29,225 square feet of gaming, 80 slots, 30 VLTs, 23 table games, 26 hotel rooms.
- Century Casino, St. Albert: 7.1 acres, 13,269 square feet of gaming, 410 slots, 24 VLTs, 10 table games.
- Century Mile Racetrack & Casino: 100 acres, 19,407 square feet of gaming, 570 slots, 14 VLTs.
- Century Downs Racetrack & Casino: 57.3 acres, 17,459 square feet of gaming, 663 slots, 10 VLTs.
The purchase price includes $192.3 million to be paid to subsidiaries of Century Casinos and approximately $29.4 million to acquire the real estate interest in Century Downs from ownership partners.
"We are pleased to extend our good partnership with VICI to our Canada portfolio," Erwin Haitzmann and Peter Hoetzinger, co-CEOs of Century Casinos, said in a written statement. "This transaction unlocks the real estate value of our Canadian properties while continuing our Canadian operations and provides us with greater financial flexibility as we continue to grow.
“We intend to use the sale proceeds to fund improvements at the Nugget (in Nevada) and for general corporate purposes. We are also looking at the potential to apply some proceeds to pay down debt under our credit agreement and/or to return funds to shareholders through stock repurchases and/or a special dividend.
"We continue to evaluate the optimal use of our capital."
Century anticipates retaining approximately $154.5 million of the proceeds after the Century Downs land payout, selling expenses, taxes and proceeds to the minority owners of Century Downs.
The transaction is subject to customary regulatory approvals and closing conditions and is expected to close in the second half of 2023.
About VICI Properties
VICI Properties Inc. is an S&P 500 experiential real estate investment trust that owns one of the largest portfolios of gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas.
VICI Properties’ geographically diverse portfolio consists of 49 gaming facilities across the United States and Canada comprising approximately 124 million square feet and features approximately 60,100 hotel rooms and more than 450 restaurants, bars, night clubs and sports books.
Its properties are occupied by gaming and hospitality operators under long-term, triple-net lease agreements.
VICI has a range of investing and financing partnerships with non-gaming operators including Great Wolf Resorts, Cabot, Canyon Ranch and Chelsea Piers. VICI also owns four championship golf courses and 34 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.
About Century Casinos
Century Casinos, Inc. is a casino entertainment company which owns and operates Century Casino & Hotels in Cripple Creek and Central City, Col., and in Edmonton; the Century Casino in Cape Girardeau and Caruthersville, Missouri., and in St. Albert; Mountaineer Casino, Racetrack & Resort in New Cumberland, W.V.; and the Century Mile Racetrack and Casino in Edmonton.
Through its Austrian subsidiary, Century Resorts Management GmbH, the company holds a 66.6 per cent ownership interest in Casinos Poland Ltd., the owner and operator of eight casinos throughout Poland; and a 75% ownership interest in Century Downs Racetrack and Casino in Calgary.
Through its United States subsidiary, Century Nevada Acquisition, Inc., the company owns the Nugget Casino Resort in Sparks, Nevada and a 50 per cent membership interest in Smooth Bourbon, LLC, which owns the Nugget’s land and building.
The company has an agreement to purchase 100 per cent of the Rocky Gap Casino Resort operations in Maryland.