VICI Properties, a U.S.-based experiential real estate investment trust, and casinos operator Penn National Gaming have entered into definitive agreements to acquire the land and real estate assets of the Margaritaville Resort Casino for approximately $261 million and $115 million in cash respectively. The aggregate purchase price payable in connection with the acquisition of the real property and operations of the Margaritaville Resort Casino is approximately $376 million in cash.
Simultaneous with the closing of this transaction, Penn National will enter into a triple-net lease agreement with the company. The lease will have an initial total annual rent of approximately $23 million 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 1.9x and the Tenant’s obligations under the lease will be guaranteed by Penn National.
VICI said it will partner with Penn National to strengthen its existing footprint in the Shreveport-Bossier region, and this partnership represents the first step in its strategy to diversify its roster of best-in-class gaming operators. It added that the transaction demonstrates the company’s ability to source and execute accretive deals that bring value to its shareholders by providing alternative financing solutions to third-party operators seeking to grow their business.
The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the second half of 2018.