VICI Properties this week announced the acquisition of the real estate assets of two Mississippi-based properties, the Fitz Casino & Hotel in Tunica and the WaterView Casino & Hotel in Vicksburg. The aggregate purchase price, $293.4 million, is being financed with cash on hand.
“This transaction with the experienced team at Foundation Gaming, given their track record of value creation in regional gaming markets, highlights VICI’s ability to execute accretive deals and close in an expeditious manner to meet our partners’ objectives, while creating value for our shareholders,” said VICI Properties Vice President of Acquisitions and Finance Danny Valoy in a statement. “Mississippi continues to be one of the largest regional gaming markets, and we are expanding our portfolio into the Vicksburg market at an attractive capitalization rate.”
VICI is simultaneously entering into a triple-net master lease agreement with subsidiaries of Foundation Gaming related to the assets. The Foundation Master Lease has an initial total annual rent of $24.25 million, representing an implied acquisition capitalization rate of 8.3% and an initial term of 15 years. There are four five-year tenant-renewal options.
The rent coverage ratio in the first year after closing is estimated to be approximately 2 x. Tenants’ obligations per the lease are guaranteed by the parent entity, Foundation Gaming.
“The extraordinary efforts of our property teams have given us the opportunity to partner with VICI on our two Mississippi properties,” said Foundation Gaming Chairman Allan Solomon. “By doing so, we have positioned our company for continued growth in the regional gaming space.”
