VICI Properties and JACK Entertainment have entered into an agreement that will see the real estate investment trust (REIT) buy the casino operator’s JACK Cleveland Casino and JACK Thistledown Racino properties in an $843.3 million all-cash deal.
This is the second purchase deal between the REIT that spun off from Caesars Entertainment Corp. in the fall of 2017 and JACK Entertainment this year.
In April, VICI and Florida-based casino and hospitality company Hard Rock International agreed to buy JACK Cincinnati Casino in a $745 million deal. The transaction was finalized in September.
JACK Entertainment’s Cleveland casino opened doors in the spring of 2012. The property occupies the historic Higbee Building in downtown Cleveland. Over the years, it cemented itself as one of Ohio’s highest grossing casinos.
JACK Cleveland Casino features 96,000 square feet of gaming space with 1,300 slot machines and more than 120 table games. It also offers eight food and beverage outlets and is connected to the 205-room Ritz-Carlton and 440-room Renaissance hotels in downtown Cleveland.
As for JACK Thistledown Racino, it was launched in April 2013 in North Randall, Ohio. It spreads over 129 acres of land and features around 57,000 square feet of gaming space with 1,459 gaming machines and six dining facilities.
VICI to Lease Back the Two Properties to JACK Entertainment
The sale of the Cleveland casino and the nearby racino is expected to close in early 2020. The deal’s finalization is subject to regulatory approvals and customary closing conditions. VICI also said that it expects its latest acquisition to be accretive immediately upon closing.
VICI will lease back the two properties to their former owner under a master triple-net lease agreement the two companies have agreed to sign once the acquisition deal closes.
Under the terms of that master lease agreement, JACK Entertainment will pay an initial annual rent of $65.9 million. The agreement will have an initial term of 15 years with four 5-year renewal options.
Commenting on today’s announcement, VICI Properties COO John Payne said that they are “excited to partner with JACK Entertainment” in Ohio which happens to be “one of the healthiest and fastest growing regional gaming markets.”
Mr. Payne went on that the 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 President Mark Dunkeson commented that they look forward to continuing to run their Cleveland casino and the JACK Thistledown Racino and that the two properties, along with assets operated by their sister companies, have “created strong connection to the city and allows us to remain heavily committed to the Cleveland area.”
Mr. Dunkeson also noted that JACK Entertainment will continue to invest significant capital into the two properties, which they expect to have a lasting positive impact on Cleveland and Cuyahoga County.
Source: VICI Properties Inc. to Acquire JACK Cleveland Casino and JACK Thistledown Racino in Sale Leaseback Transaction With JACK Entertainment, BusinessWire.com
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