Foundation Gaming & Entertainment announced it sold the property assets of the Fitz Casino & Hotel in Tunica, Miss. and the WaterView Casino & Hotel in Vicksburg, Miss. to VICI Properties (NYSE:VICI) for $293.4 million.
The casino operator will proceed to lease back the gaming venue from the real estate investment trust (REIT). VICI paid for the property with cash on hand.
Simultaneous with the acquisition, VICI entered into a triple-net master lease agreement with subsidiaries of Foundation Gaming (the “Foundation Master Lease”) related to the assets. The Foundation Master Lease has an initial total annual rent of $24.25 million, representing an implied acquisition capitalization rate of 8.3%, and an initial term of 15 years, with four 5-year tenant renewal options,” according to a statement issued by the New York-based REIT.
Privately held Foundation Gaming & Entertainment operates the two aforementioned Mississippi casino-resorts and its employees have worked in major regional domestic markets as well as Atlantic City and Las Vegas.
VICI Continues Adding to Casino Portfolio
News of the sale-leasebacks in Mississippi extends what’s been an active December for VICI, which owns Caesars Palace on the Las Vegas Strip.
To start the month, the REIT announced its buying the 49.9% of the Mandalay Bay and MGM Grand on the Strip that it previously didn’t own. Just a few days later, the casino landlord said it’s providing financing to Century Casino so that the operator can enhance two Missouri gaming venues of which VICI owns the property assets.
Earlier this week, VICI revealed it inked a new triple-net lease agreement with Hard Rock International pertaining to the Mirage Las Vegas.
VICI is the largest landlord on the Strip as it owns the real estate of nearly all the MGM-operated venues there as well as Caesars Palace and the Venetian, but the REIT is also becoming a major holder of Mississippi gaming real estate. Prior to today’s news involving the Foundation Gaming properties, VICI owned the real estate assets of Beau Rivage, Gold Strike, Harrah’s Gulf Coast and Harrah’s Tunica.
Foundation Gaming New VICI Tenant
An important element in the Mississippi transactions is that VICI is gaining a new tenant, meaning increased client diversification. The REITs major lessees include Caesars Entertainment, Century Casinos and MGM Resorts International, among others.
Foundation Gaming & Entertainment operates the two Mississippi casino-hotels. The company acquired the Fitz, which opened in 1994, in 2018. The WaterView debuted in 1993 and was purchased by Foundation in 2015.
WaterView “is situated along the banks of the Mississippi River and contains 37,000 square feet of gaming space, 650 slot machines, 10 table games, three food and beverage outlets and is connected to a 122 key-hotel,” according to the statement.
The Fitz has six restaurants, nine tables and 864 slot machines.
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