NEW YORK–VICI Properties Inc. (NYSE:VICI) (together with its affiliates, “VICI Properties” or the “Company”), an experiential real estate investment trust (“REIT”), today announced it has completed the acquisition for the previously announced transaction with Caesars Entertainment Corporation (NASDAQ:CZR) (“Caesars Entertainment” or “Caesars”) to acquire, and lease back, all of the land and real estate assets associated with the Octavius Tower at Caesars Palace for $507.5 million. The Company funded the purchase of Octavius Tower using available cash. Caesars has operated, and will continue to operate, Octavius Tower pursuant to the terms of an existing ground lease until such time as the Caesars Palace Las Vegas lease is amended to incorporate the Octavius Tower ground lease, which will happen concurrently with the closing of Harrah’s Philadelphia (as discussed herein). The annual rent payment to the Company for the Octavius Tower will be $35 million.
The acquisition of Octavius Tower represents the consummation of a portion of the transactions contemplated and detailed in the previously announced Letter of Intent (“LOI”) entered into on May 8, 2018 by and between the Company and Caesars. On July 11, 2018, VICI Properties and Caesars entered into a definitive agreement with respect to the other transactions contemplated by the LOI, including the acquisition of all of the land and real estate assets associated with Harrah’s Philadelphia for $241.5 million, which will be reduced by $159 million to reflect the aggregate net present value of the contemplated modifications to certain of the Company’s leases with Caesars, resulting in cash consideration of $82.5 million. The acquisition of Harrah’s Philadelphia and the entry into the contemplated modifications to the lease agreements are expected to close during the fourth quarter of 2018.