VICI expands to Canada through real estate acquisition of four Pure Canadian Gaming casinos in Alberta

Real estate investment trust VICI Properties announced Monday it has acquired the real estate assets of four casinos - PURE Casino Edmonton, PURE Casino Yellowhead, PURE Casino Calgary and PURE Casino Lethbridge, all located in the province of Alberta - from PURE Canadian Gaming Corp. The deal expands VICI's footprint into Canada.

The purchase was carried out for an aggregate price of approximately CAD 271.9 million ($200.8 million). VICI financed the transaction with a combination of cash on hand and from drawing down funds under its existing revolving credit facility in Canadian dollars.

PURE Casino Calgary.

Simultaneous with the acquisition, VICI entered into a triple-net master lease agreement with PURE covering the four-casino portfolio. The master lease agreement has an initial total annual rent of approximately CAD 21.8 million ($16.1 million) representing an implied acquisition capitalization rate of 8.0%, and an initial term of 25 years, with four 5-year tenant renewal options.

John Payne, President and Chief Operating Officer of VICI Properties, said: “Over the last five and a half years, VICI has built a portfolio of market-leading experiential real estate. Today’s announcement marks another momentous first for VICI as we expand our footprint internationally into Canada with the acquisition of the PURE portfolio.” 

“This transaction highlights our ability to source, structure, and fund cross-border transactions, widening our opportunity set as we continue along our growth trajectory. We are pleased to add PURE as our eleventh tenant and look forward to a mutually beneficial partnership,” he added.

The purchase expands VICI's operations to Canada. But as it eyes international development, it still remains a strong force in its home market of the US, with new projects in line. Earlier in December, VICI announced a new partnership with land-based operator Century Casinos in its project to open a new property in Missouri. 

Century Casino Caruthersville is the last remaining riverboat casino on open water in the state. It is set to be replaced with a new casino, plus an adjacent 38-room hotel tower. Pursuant to an amendment to the existing master lease between the parties, VICI will own the real estate improvements associated with the projects, expected to cost approximately $51.9 million.

The company also recently agreed to buy Blackstone’s stake in MGM Grand Las Vegas and Mandalay Bay, further expanding its footprint in the gambling mecca. The deal values the two properties at $5.5 billion and is expected to be completed early in the first quarter of 2023.