VICI Properties Completes Acquisition of Harrah’s Philadelphia and Lease Modifications
"Adding Harrah’s Philadelphia to our growing portfolio of best in-class gaming real estate strengthens our presence in the attractive Mid-Atlantic gaming market," says Edward Pitoniak, chief executive officer of VICI Properties.
CHESTER, PA—VICI Properties, an experiential real estate investment trust, has completed previously disclosed transactions with Caesars Entertainment Corporation to acquire, and lease back, all of the land and real estate assets associated with Harrah’s Philadelphia. The company also modified leases with Caesar’s in connection with the transaction
Harrah’s Philadelphia was acquired for a purchase price of $241.5 million, which was reduced by $159.0 million to reflect the aggregate net present value of the lease modifications, resulting in a net cash consideration of $82.5 million, excluding transaction costs. The company funded the net purchase price using available cash. The Harrah’s Philadelphia property provides for initial annual rent of $21 million.
“The VICI and Caesars teams worked very productively together to complete this important and value-creating transaction for both companies,” says Edward Pitoniak, chief executive officer of VICI Properties. “Adding Harrah’s Philadelphia to our growing portfolio of best in-class gaming real estate strengthens our presence in the attractive Mid-Atlantic gaming market. In addition, guided by a deep understanding of the needs and goals of our tenants, we amended the original lease agreements to be better aligned with the strategic interests of both parties. For VICI shareholders, these changes significantly improve our same-store rent growth in the near-term, protect against future volatility in our rental income over the long-term and, most importantly, incentivize our tenant to invest capital into the real estate to grow and strengthen their own business.”
Harrah’s Philadelphia was built in 2006 and is benefiting from significant property enhancements completed in 2017. Harrah’s Philadelphia is located along the waterfront in Chester, PA. The property includes two million square feet of space, featuring approximately 2,450 slot machines, 110 table games, several bars and restaurants and parking garages. Caesars will lease from VICI Properties the real estate associated with Harrah’s Philadelphia.