VICI Properties to Acquire JACK Cleveland Casino, JACK Thistledown Racino in $843.3M Sale-Leaseback Deal
JACK Cleveland Casino opened in May 2012 in the historic Higbee Building in Downtown Cleveland, featuring 96,000 square feet of gaming space.
CLEVELAND—New York City-based VICI Properties has entered into a definitive agreement with an affiliate of JACK Entertainment to acquire the JACK Cleveland Casino here and the JACK Thistledown Racino in North Randall, OH, for $843.3 million in cash.
Simultaneous with the closing of the transaction, VICI will enter into a master triple-net lease agreement with JACK Entertainment. The master lease will have an initial total annual rent of $65.9 million, for an implied capitalization rate of 7.8%, and an initial term of 15 years with four 5-year tenant renewal options. The rent coverage ratio at closing is expected to be approximately 1.72x and the tenant’s obligations under the lease will be guaranteed by Rock Ohio Ventures LLC.
Additionally, VICI will provide a $50-million loan secured by certain non-gaming real estate assets of Rock Ohio Ventures LLC, at a 9% interest rate for a term of five years with two 1-year extension options.
Mark Dunkeson, CEO of JACK Entertainment, reports that the firm has invested more than $700 million into JACK Cleveland Casino and JACK Thistledown Racino since the properties opened in 2012.
JACK Cleveland Casino opened in May 2012 in the historic Higbee Building in downtown Cleveland, Ohio. The property features 96,000 square feet of gaming space, 1,300 gaming machines, over 120 table games and eight food and beverage outlets. The property is connected to the 205-key Ritz-Carlton and 440-key Renaissance hotels. JACK Thistledown Racino opened in April 2013 in North Randall and is the leading thoroughbred racino in the Cleveland MSA. The property is situated on 129 acres and features 57,000 square feet of gaming space, 1,459 gaming machines and six food and beverage outlets.
Goldman Sachs & Co. LLC is acting as financial advisor and Kramer Levin Naftalis & Frankel LLP is acting as legal advisor to VICI Properties for the transaction described herein.
In April of this year, VICI Properties and a subsidiary of Hard Rock International entered into definitive agreements to acquire the JACK Cincinnati Casino and Turfway Park for approximately $745 million.