VICI Properties has acquired Jack Cleveland Casino and Jack Thistledown Racino for US$843 million.
US.- VICI Properties has announced that it has entered into a definitive agreement with an affiliate of JACK Entertainment to acquire the totality of the membership interests of its affiliates that own JACK Cleveland Casino and JACK Thistledown Racino for approximately US$843 million in cash.
The companies announced that after the deal is closed, JACK will rent the properties back from the real estate investment trust in a master triple-net lease agreement. The master lease will have an initial total annual rent of US$65.9 million, for an implied capitalisation rate of 7.8%, and an initial term of 15 years with four 5-year tenant renewal options.
The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in early 2020. The acquisition is expected to be accretive immediately upon closing.
John Payne, President and Chief Operating Officer of VICI Properties said, “We are excited to partner with the team at JACK Entertainment as they focus on investing and operating in the Cleveland market. Ohio continues to be one of the healthiest and fastest-growing regional gaming markets and we are thrilled to add high-quality, urban real estate to our portfolio at an attractive capitalization rate. This transaction represents another great example of VICI’s ability to creatively source and execute accretive deals that bring value to our shareholders while furthering our strategic goal to diversify our roster of best-in-class gaming operators.”
“JACK Entertainment looks forward to continuing to operate JACK Cleveland Casino and JACK Thistledown Racino,” said Mark Dunkeson, Chief Executive Officer of JACK Entertainment. “The combined efforts of our gaming properties together with the other Cleveland assets operated by our sister companies including the Cleveland Cavaliers, Avenue Shops at Tower City and the May Company Building, have created a strong connection to the city and allows us to remain heavily committed to the Cleveland area. We have invested more than $700 million into JACK Cleveland Casino and JACK Thistledown Racino since the properties opened in 2012 and we will continue to invest significant capital into these properties which will have a lasting positive impact on the city and Cuyahoga County.”