May 17 was a big date for New York-based real estate investment trust VICI Properties Inc. as it announced plans to acquire the Canadian assets of Colorado-based casino company Century Casinos Inc. The acquisition includes Century Casino & Hotel, Century Casino St. Albert, Century Mile Racetrack and Casino in Edmonton, Alberta, and Century Downs Racetrack and Casino in Calgary, Alberta. The transaction, collectively known as the Century Canadian Portfolio, is expected to cost VICI C$221.7 million (US$164.7 million), all in cash.
A Powerful Integration
The acquisition will be integrated into the existing Century Master Lease, a triple net master lease agreement between VICI Properties and Century. The transaction is expected to result in an annual rental increase of C$17.3 million (US$12.8 million), with an acquisition capitalization rate of 7.8%. Including the soon-to-be-acquired Rocky Gap Casino Resort and the Century Canadian portfolio, property-level rental coverage under Century Master Lease is expected to be approximately 2.0x. Once the deal closes, VICI is expected to benefit immediately.
Upon closing, the initial base lease term of the Century Master Lease will be extended to 15 years, with four 5-year renewal options for tenants. Century Casinos Inc. remains responsible for Tenant’s obligations under the Century Master Lease. VICI Properties President and Chief Operating Officer John Payne expressed excitement about the company’s third international investment at this momentous occasion. He highlighted their continued drive for global expansion and confidence in the Canadian gaming market, while praising the strengthened partnership with Century and their growth together.
The transaction is subject to customary regulatory approvals and required closing conditions prior to formal closing. The transaction is expected to close in the second half of 2023. VICI Properties provided further details of the acquisition in a “Deal Summary” presentation, which can be found on the “Investors” section of its website under the “Events and Presentations” menu.
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