LAS VEGAS — VICI Properties (NYSE: VICI), a New York City-based REIT, has provided a $400 million mortgage loan to a subsidiary of Caesars Entertainment Inc. (NASDAQ: CZR) that is secured by the Caesars Forum Convention Center in Las Vegas.
The deal was set in motion in June when VICI and Caesars entered into an agreement whereby VICI provided Eldorado Resorts with a $400 million loan secured by the recently opened Caesars Forum Convention Center. The loan was conditioned to completion of the $17.5 billion merger between Eldorado and Caesars, which was officially completed in July.
No details on what proceeds will specifically be used for were provided, but the COVID-19 pandemic has created major disruption within the gaming and hospitality industry and forced many operators like Caesars to function at reduced capacity and profit margins.
VICI Properties also agreed to purchase 23 acres of undeveloped land in Las Vegas. Best U.S. Casinos, which covers the gaming and entertainment industry, reported that VICI agreed to pay $103.5 million for that acreage, but did not disclose any specific plans for future development.
The financing bears an initial interest rate of 7.7 percent, has a term of five years and is pre-payable beginning in the third year subject to certain conditions. VICI funded the loan with cash on hand.
The Caesars Forum Conference Center spans 550,000 square feet and includes more than 300,000 square feet of flexible meeting space. The property also offers direct access to more than 8,500 hotel rooms at Harrah’s Las Vegas, the LINQ Hotel + Experience and the Flamingo Las Vegas.
VICI Properties owns a portfolio of 31 gaming properties that comprises more than 50 million square feet of commercial space, 20,000 hotel rooms and 200 restaurants. Caesars Entertainment operates more than 50 hotel and casino properties worldwide under its Caesar’s, Harrah’s and Horseshoe brands.
— Taylor Williams