VICI Properties Inc. acquires Venetian Resort properties in Las Vegas

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NEW YORK–(BUSINESS WIRE) – VICI Properties Inc. (NYSE: VICI) (“VICI Properties” or the “Company”) announced today that it has entered into definitive agreements to acquire Las Vegas Sands Corp. (NYSE: LVS) (“LVS”) has completed the land and real estate assets associated with the Venetian Resort Las Vegas and the Sands Expo and Convention Center in Las Vegas, Nevada (collectively the “Venetian Resort”) for 4 $ .0 billion in cash, which is a 6.25% cap. A subsidiary of certain funds managed by subsidiaries of Apollo Global Management, Inc. (the “Apollo Funds”) has agreed to acquire the operating company of the Venetian Resort for $ 2.25 billion, subject to customary closing conditions, of which $ 1.2 billion in a secured term loan from LVS and the remainder is cash.

Simultaneously with the closing of the transaction, the company will conclude a triple net leasing contract for the Venetian Resort with a subsidiary of Apollo Funds. The lease has an initial total annual rent of $ 250.0 million and an initial term of 30 years with two ten-year extension options for the tenant. LVS has agreed to make lease payments to guarantee the Venetian Resort’s rental obligations under the rental agreement through 2023, with an early termination of this lease payment support if the Venetian Resort reaches a certain financial milestone or a change of tenant occurs. The rent under the lease will increase by the higher of 2.0% or the CPI (subject to a cap of 3.0%) starting at the beginning of the third year of the rental or when the Venetian Resort reaches certain financial milestones . The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close by the end of 2021. The company intends to fund the transaction through a combination of cash, equity and long-term debt financing.

Ed Pitoniak, Chief Executive Officer of VICI Properties, said: “When designing and building the Venetian Resort, Sheldon Adelson has been one of the great American placemakers of the past 100 years. There are few assets in American commercial real estate that deserve to be called monumental, but the Venetian Resort is truly monumental in both physical size and economics. Upon completion of the transaction, VICI is honored to uphold the legacy of Mr. Adelson and the Las Vegas Sands team led by Rob Goldstein and Patrick Dumont. ”

John Payne, President and Chief Operating Officer of VICI Properties, said, “We are very excited to add to our portfolio of market leading experience with the iconic Venetian Resort complex. We have long admired the unmatched size, size and quality of the Venetian Resort and are proud to opportunistically acquire the asset at an attractive, profitable capitalization rate for shareholders. Furthermore, we are confident that Apollo’s vision will greatly benefit the operation of the property in the years to come. ”

Apollo Partner Alex van Hoek said, “The Venetian Resort is a Las Vegas marquee hotel with an unmatched array of amenities to cater to hospitality, meeting events, gaming and entertainment categories – categories we believe in that they are well positioned for strong post-Covid recovery and long-term growth. We see a significant opportunity to invest in and accelerate the growth of The Venetian Resort and we look forward to empowering and supporting the talented team there to make this vision a reality. ”

The Venetian Resort Las Vegas offers:

  • Three hotel towers: The Venetian Tower is a 35-story, three-wing luxury hotel tower with 3,015 suites; the second tower is an adjoining Venezia tower with 1,013 suites and 12 floors; The Palazzo Tower has 3,064 suites in a 50-story luxury hotel tower, which offers a modern European ambience and design and is directly connected to the Venetian Tower and the Sands Expo Center

  • Approximately 225,000 square feet of gaming space and approximately 210 table games and 1,480 slot machines and ETGs

  • A variety of amenities for its guests, including a Paiza Club, several theaters and the Canyon Ranch SpaClub

  • An enclosed retail, food and entertainment complex known as the Grand Canal Shoppes

  • Sands Expo Center, one of the largest overall exhibition and convention facilities in the United States (by net rental space), with approximately 1.2 million gross square feet of exhibition and meeting space

  • The Venetian Resort also includes approximately 1.1 million square feet of meeting and conference facilities connecting the Sands Expo Center to the Venetian Resort Las Vegas; Together with the Sands Expo Center, the facilities provide approximately 2.3 million gross square feet of state-of-the-art exhibition and meeting facilities that can be configured to provide small, medium, or large meeting rooms and / or large spaces to host multimedia events or trade shows

  • This mixture of hotel, gaming, food and drink, entertainment, shopping as well as meeting and conference functions makes the Venetian Resort diversified across several sources of income

The Venetian Resort and Madison Square Garden Entertainment Corp. (“MSG”) are working to bring a 400,000 square foot venue specially built for music and entertainment to Las Vegas. MSG is currently building the MSG Sphere at The Venetian, an 18,000-seat venue that is located near the Venetian Resort and will be attached to the Venetian Resort and is expected to open in 2023.

Morgan Stanley & Co LLC acted as lead strategic and financial advisor to VICI Properties and Deutsche Bank Securities acted as financial advisor to VICI Properties on the transaction. Kramer Levin Naftalis & Frankel LLP acted as legal advisor and Hogan Lovells acted as tax advisor to VICI Properties.

A presentation of the transaction can be found on the company’s website at http://investors.viciproperties.com/events-and-presentations/.

About VICI properties

VICI Properties Inc. is an experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including the world-renowned Caesars Palace. VICI Properties’ national, geographically diverse portfolio consists of 28 gaming facilities spanning over 47 million square feet, with approximately 17,800 hotel rooms and more than 200 restaurants, bars, nightclubs and sports betting. Its properties are leased to industry-leading gaming and hospitality operators including Caesars Entertainment, Inc., Century Casinos, Inc., Hard Rock International Inc., JACK Entertainment LLC, and Penn National Gaming, Inc. VICI Properties also has an interest in Chelsea Piers , New York and owns four championship golf courses and 34 acres of undeveloped land adjacent to the Las Vegas Strip. VICI Properties’ strategy is to create the highest quality, most productive experience real estate portfolio nationwide.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the unrelated words “believe”, “believe”, “estimate”, “expect”, “guide”, “intend”, “plan”, “project” and similar expressions have to historical matters. All statements that are not historical facts are forward-looking statements. You should interpret and rely on forward-looking statements with caution as they involve known and unknown risks, uncertainties and other factors that, in some cases, are beyond the control of the company and that could materially affect actual results, performance or achievements. These risks and uncertainties include, but are not limited to: the impact of changes in general economic conditions, including low consumer confidence, unemployment, and depressed house prices due to the severity and duration of a downturn in the US or the global economy (including the COVID-19 emergency public health and changes in economic conditions as a result of the public health emergency caused by COVID-19); Risks that the pending transaction will not close on the foreseen conditions or timeframe, or at all; the ability of the parties to meet the conditions set forth in the final transaction documents, including the ability to obtain the regulatory and regulatory approvals and consents required to complete the pending transaction or other delays or obstacles to the completion of the transaction; the ability of the parties concerned to obtain, at the expected or at all, the financing necessary to complete the Transactions; Disruption of the property and the operation of the property in question while the pending completion of the pending transactions is pending; and risks that the Company will not achieve the expected benefits (including expected increases or amounts of future rental payments) from the pending transaction. Important risk factors that could affect the company’s business, results of operations, and financial condition will be disclosed from time to time in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or for any other reason, except as required by applicable law.

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