This week, an experiential real estate investment trust, VICI Properties, announced that it will be expanding into Canada with a new agreement. An agreement has been struck with Pure Canadian Gaming Corporation to acquire its four casino properties in Alberta, Canada. The four casinos are Pure Casino Edmonton, Pure Casino Yellowhead, Pure Casino Calgary, and Pure Casino Lethbridge.
VICI Properties Inc. is an S&P 500® experiential real estate investment trust that owns some of the leading gaming, hospitality and entertainment establishments in the world. Those include Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas. The company also owns an impressive 49 gaming facilities across U.S. and Canada.
Terms of the Agreement
According to the press release from the real estate trust, the Pure Portfolio was acquired from Pure Canadian Gaming Corporation for an aggregate purchase price of approximately CA$271.9 million. Also, the trust funded the transaction of the four Alberta casinos with a combination of cash on hand and from withdrawing funds under its existing revolving credit facility in Canadian dollars.
In addition to the purchase of the properties, the company has also entered into a triple-net master lease contract with Pure Canadian Gaming Corp. for the entire Pure Portfolio. The Pure Master Lease has an upfront total annual rent of CA$21.8 million, which represents an implied acquisition capitalization rate of 8% and an initial 25 years term, with four 5-year tenant renewal options.
John Payne, who is President and Chief Operating Officer at VICI Properties commented on the agreement, as he shared that over the last five and a half years, the company was able to build a significant market-leading portfolio of real estate. In his words, this latest announcement marks another major entry for the company which expands into Canada with the purchase of the Pure brand.
He continued by saying that the translation further cement’s the trust’s ability to source, structure, and fund cross-border transactions, thus expanding their opportunity as the company resumes its growth trajectory. Lastly, Mr. Payne, stated that the firm is pleased to add the Pure brand as its eleventh tenant and is looking forward to mutually beneficial cooperation.
More on Alberta’s Industry
Meanwhile, Alberta’s land-based casino industry continues to expand, as in October 2022, the province saw the start of the construction of Bear Hills Casino and Travel Resort. The new amenity will be located on Queen Elizabeth II Highway, between Highways 611 and 613, and it is scheduled to launch in late 2023. It will offer gambling, dining, a gas station, and an entertainment venue.
In addition to that, last summer Capital City Casinos filed a request to the Alberta Gaming, Liquor and Cannabis Commission to relocate its Camrose Casino Resort to South Edmonton. However, its request was denied by the regulator. Being unhappy with the news, the ownership of the casino is looking to launch an official appeal of the decision.
Source: “VICI Properties Inc. Acquires Four Canadian Gaming Properties in Sale Leaseback Transaction With Pure Canadian Gaming Corp.” Yahoo, January 9, 2023