Vici Properties has recorded a slight revenue dip to $214m (2018: $218.3m) in the year’s first quarter, as it lauds two key acquisitions as further “strategic milestones” for the company.
Earlier in the year Vici joined forces with Penn National Gaming for the acquisition of Margaritaville Resort Casino, located in Bossier City, Louisiana, with the former securing the land and real estate assets for $261.1m, while the latter gained the operating aspect for $114.9m.
Sealing a 15-year lease for an annual rent of $23.2m, it was followed up subsequent to the quarter’s end with a deal conducted alongside Seminole Hard Rock Entertainment for the purchase of Jack Cincinnati Casino, located in downtown Cincinnati, Ohio.
Again sealing a $558.3m deal for the land and real estate assets, Hard Rock secured its operating status for $186.5m, with a lease for the same term amounting to $42.75m, and containing four five-year tenant renewal options.
Edward Pitoniak, chief executive officer of Vici Properties, explained: “Our activities and results in the first quarter are another great example of the high energy our team brings every day to the achievement of our strategic goals. During the quarter, we closed on the acquisition of Margaritaville, demonstrating our ability to partner with best-in-class operators such as Penn National.
“Subsequent to quarter end, we announced a new partnership with Hard Rock, a global, investment-grade leader in gaming, hospitality and leisure, through our joint acquisition of Jack Cincinnati.
“This transaction represents another strategic milestone for Vici as, in addition to continued diversification with what will be our third tenant, it expands our footprint into a strong urban gaming market with a newly built asset.
“Additionally, in quarter one, we continued to build the strongest balance sheet in our sector, both by further reducing our exposure to floating-rate debt and by activating our at-the-market offering program. All of these activities and results once again demonstrate our commitment to providing sector-leading growth and returns to our stockholders through the execution of accretive transactions and the building of a fortress capital structure.”
In its financial summary, Vici stressed that its revenue decline “included $17.2 million associated with tenant reimbursement of property taxes no longer recorded as revenue,” without which a 6.5 per cent increase would’ve been felt.
Leasing revenue for the quarter jumped 6.4 per cent to $150.8m (2018: $112.1m), with adjusted EBITDA finishing at $199m, a 13.9 per cent increase from $174.7m
David Kieske, chief financial officer of Vici Properties, added, “With the addition of Harrah’s Philadelphia and Margaritaville to our portfolio, we have added $21.0m and $23.2m of initial annual rent, respectively, to our revenue base.
“Our first quarter exemplifies the efficiency and scalability of our triple-net model where we achieved approximately 100 per cent revenue flow through to Adjusted EBITDA, with the incremental revenue earned from these new assets in our portfolio.”