Description
Vici Properties is a real estate investment trust (REIT) specializing in casino properties, based in New York City. It was formed in 2017 as a spin-off from Caesars Entertainment Corporation as part of its subsidiaries' bankruptcy plan. It owns 29 casinos, hotels, and racetracks and 4 golf courses throughout the United States.
History
Vici Properties was formed as part of the Chapter 11 bankruptcy reorganization of Caesars Entertainment Operating Company (CEOC), the largest division of Caesars Entertainment. After placing CEOC into bankruptcy in January 2015, Caesars proposed splitting CEOC into two companies: a REIT, which would own the company's casinos, and an operating company, which would manage them. The plan was designed to maximize value for CEOC's creditors by taking advantage of favorable tax treatment for REITs. Several members of Congress opposed the plan, calling it an abuse of the REIT laws. They asked the Internal Revenue Service to deny tax-free status to the spin-off, but their protest went unheeded.
The spin-off of Vici to CEOC's creditors was completed on October 6, 2017, the day that CEOC emerged from bankruptcy. Vici began with a portfolio of nineteen casinos and racetracks, all leased to Caesars at a total initial annual rent of $630 million, and four golf courses. The company's name was adopted from the phrase "Veni, vidi, vici," commonly attributed to Julius Caesar.
Vici acquired Harrah's Las Vegas from Caesars in December 2017 for $1.1 billion, and leased it back at an initial annual rent of $87.4 million.
MGM Growth Properties, a REIT affiliated with Caesars competitor MGM Resorts International, offered in January 2018 to acquire Vici for an estimated $5.9 billion. Vici's board rejected the offer, deciding instead to proceed with a planned initial public offering. Vici completed its IPO on the New York Stock Exchange in February 2018, raising $1.2 billion.
The company moved its headquarters to New York City from the Las Vegas area in mid-2018.
Vici completed two transactions with Caesars in 2018, purchasing the Octavius Tower at Caesars Palace for $508 million and Harrah's Philadelphia for $242 million, and leasing them back to Caesars for $35 million and $21 million per year, respectively.
In 2019, Vici made two purchases in conjunction with Penn National Gaming. Vici bought the real estate of the Margaritaville Resort Casino in Louisiana and Greektown Casino–Hotel in Detroit for $261 million and $700 million, respectively, while Penn bought both properties' operating businesses and leased them from Vici for annual rent of $23 million and $56 million, respectively. Vici bought a second casino from Greektown seller Jack Entertainment, Jack Cincinnati Casino, in September 2019, paying $558 million for the real estate; Hard Rock International leased the property for $43 million per year.
In December 2019, Vici bought three casinos in Missouri and West Virginia from Eldorado Resorts in conjunction with Century Casinos: Isle Casino Cape Girardeau, Lady Luck Casino Caruthersville, and Mountaineer Casino, Racetrack and Resort. Vici paid $278 million for the real estate assets, and leased them to Century for $25 million per year. A month later, the company bought two more properties from Jack Entertainment, Jack Cleveland Casino and Jack Thistledown Racino, for a total of $843 million, leasing them back for $66 million per year.
In July 2020, Eldorado Resorts acquired Caesars Entertainment, becoming Vici's primary tenant, and renamed itself to Caesars Entertainment. In connection with this acquisition, Vici bought three properties (Harrah's Atlantic City, Harrah's Laughlin, and Harrah's New Orleans) from Caesars for a total of $1.8 billion, and leased them back to the new Caesars for $154 million per year.
In March 2021, Vici agreed to purchase the real estate of the Venetian complex on the Las Vegas Strip from Las Vegas Sands for $4 billion. The sale includes the Venetian and Palazzo casino hotels and the Sands Expo convention center. Apollo Global Management would acquire the operating business and lease the property from Vici for $250 million per year.
In August 2021, Vici agreed to acquire MGM Growth Properties for $17.2 billion (including $5.7 billion in assumed debt). The purchase would add full ownership of thirteen properties to Vici's portfolio, and half ownership of the MGM Grand Las Vegas and Mandalay Bay resorts, and would increase Vici's annual revenue by $1 billion, along with making it the largest land owner on the Las Vegas Strip owning over 660 acres. The deal is expected to close in the first half of 2022.
