Las Vegas: Vici vows Venetian facelift

May 2, 2024 10:59 AM
Photo: Courtesy Vici Properties
  • David McKee, CDC Gaming Reports
May 2, 2024 10:59 AM
  • David McKee, CDC Gaming Reports

Vici Properties Wednesday announced first-quarter revenues of $951.5 million, an 8.4 percent improvement over the first quarter of 2023. The real estate investment trust also grew profits 13.7 percent to $590 million or 57 cents per share.

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The REIT issued $1 billion in senior-grade investment notes in order to refinance existing debt. Vici closed the quarter with $514.9 million in cash, plus $682.7 million of estimated forward-sale equity proceeds.

Vici stole its own thunder with the announcement that it will be putting $700 million toward “extensive renovation projections” at the 25-year-old Venetian in Las Vegas. Added CEO Edward Pitoniak, “The Venetian Resort operating team has driven strong performance since Vici and Apollo [Management] acquired the property in 2022, and we look forward to supporting our partners as they aim to continue to elevate the guest experience, and further maximize the economic profitability of the property.”

Jefferies Equity Research analyst David Katz reacted favorably to the news, saying that it “presents a solid use of long-term capital in a durable growth asset, given the apparently limited transaction market activities.” He predicted “a modestly positive reaction in the shares,” which did not materialize in after-hours trading.

The Venetian investment comes in two parts. A $400 million loan will be drawn immediately, while the owners have the option of drawing an additional $300 million by November 1, 2026. Read a company explanation, “The Venetian Capital Investment is expected to be funded with a combination of cash and proceeds from the partial settlement of the Company’s outstanding forward equity sale agreements.”