Real estate investment trust VICI Properties said Thursday it was in talks with tenants that operate the New York-based company’s 28 gaming properties over possible lease modifications, but has yet to reach any agreements.
In a statement and a separate filing with the Securities and Exchange Commission, VICI said its tenants have paid rent through April, but the impact of the COVID-19 coronavirus pandemic, which has shut down casino operations nationwide, will materially affect how the company calculates future credit losses.
VICI, which was spun off of the Caesars Entertainment bankruptcy in 2017, owns the land and buildings for gaming properties currently managed by five casino operators: Caesars Entertainment, Century Casinos Inc., Seminole Hard Rock International, Jack Entertainment, and Penn National Gaming.
VICI also owns four golf courses and 34 acres of undeveloped land adjacent to the Las Vegas Strip.
“While we have not yet agreed to any lease modifications or other concessions with any of our tenants if the current environment persists, we may ultimately support tenants during the short term in ways that we believe will benefit the company over the long term,” VICI said in a statement.
The company said it has roughly $310 million in unrestricted cash on its balance sheet and $1 billion available under its credit facility that has not been drawn down as of Thursday.
VICI also has access to $1.3 billion in proceeds from the settlement of 65 million shares of the company’s stock that are subject to sales agreements from the pending $17.3 billion merger between Eldorado Resorts and Caesars.
VICI does not have any debt coming due until December 2024.
“We believe that our nation, our sector, our tenants and our REIT will ultimately come through the COVID-19 pandemic by means of our collaborative strength,” VICI CEO Edward Pitoniak said in a statement. “we’ve been committed to full and forthright dialogue with our stockholders and other key stakeholders and that dialogue is more important than ever in a time like this.”
VICI raised more than $2.5 billion in new debt in January because of the REIT’s involvement in the Eldorado-Caesars in which three Caesars properties under the Harrah’s brand in Atlantic City, Laughlin, Nevada, and New Orleans were sold to VICI for a combined $1.8 billion. VICI will lease the operations back to Eldorado for a total annual rent of $154 million.
VICI owns the real estate associated with more than a dozen other Caesars properties that will become part of Eldorado after the merger.
“Eldorado continues to pursue the regulatory approvals necessary to close its merger with Caesars,” VICI stated. “We have raised all equity and debt funding necessary to close on our part of the overall Eldorado-Caesars transaction.”
Shares of VICI closed at $15.75 on the New York Stock Exchanges Thursday, down 34 cents or 2.11%
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
