VICI Properties makes first international investment with Pure Casino deal in Alberta

January 9, 2023 7:14 PM

VICI Properties makes first international investment with Pure Casino deal in Alberta

Photo: Edmonton, Alberta skyline/Shutterstock
  • Mark Keast, CDC Gaming Reports
January 9, 2023 7:14 PM

VICI Properties Inc. on Monday announced that it has acquired the real estate assets of the Pure Casino properties based in Alberta for an aggregate purchase price of approximately $271.9 million CAD ($200.8 million US). The deal is VICI’s first international investment.

PURE is the largest and longest-operating casino company in the Western Canada province, with four properties: Pure Casino Edmonton, Pure Casino Yellowhead (also located in Edmonton), Pure Casino Calgary, and Pure Casino Lethbridge. VICI bought all four properties.

Key to the deal is VICI entering into a triple-net master lease agreement with Pure covering the Pure portfolio with an annual rent of approximately $21.8 million CAD ($16.1 million USD) and an initial term of 25 years with four 5-year tenant renewal options.

“Over the last five and a half years, VICI has built a portfolio of market-leading experiential real estate,” said John Payne, president and chief operating officer of VICI Properties, in a statement. “Today’s announcement marks another momentous first for VICI as we expand our footprint internationally into Canada with the acquisition of the Pure portfolio. This transaction highlights our ability to source, structure, and fund cross-border transactions, widening our opportunity set as we continue along our growth trajectory. We are pleased to add Pure as our eleventh tenant and look forward to a mutually beneficial partnership.”

The Pure portfolio totals 247,450 square feet of space, 89 table games, 56 poker tables, 2,864 slots and 104 VLTs (video lottery terminals).

VICI Properties Inc. owns one of the largest portfolios of gaming, hospitality and entertainment destinations – 49 gaming destinations and four championship golf courses located across the U.S. – including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas. VICI closed at $31.98 on the NYSE today at 3:08 p.m. ET, up $0.18 or 0.57%.

According to an analyst report from Truist Securities, the Canadian gaming market generated $12B of GGR (in 2019) across 114 casinos. The four Pure properties were built between 1986-2000 and have each undergone recent investment/upgrading.

“With yet another small deal in a matter of weeks, VICI 1) further diversifies with an additional tenant, 2) expands internationally for the first time into Canada and 3) proves they’ll continue to execute accretive M&A despite a challenging environment. We make no model/PT changes at this time and reiterate our Buy rating,” the report said.