In the face of continued turmoil across the United States, Vici Properties has removed its 2020 guidance as the real-estate investment trust offers a plethora of updates.
Speaking of the merger of Caesars Entertainment and Eldorado Resorts, liquidity position and real-estate portfolio, REIT, headquartered in New York, emphasises a belief that they “will ultimately come through.”
In light of the current economic uncertainty and rapidly changing circumstances associated with the COVID-19 pandemic, the community, which celebrated property additions in the midst of a transformative period earlier in the year, released an update.
Choosing not to issue another outlook for 2020, with previous remarks made before COVID-19 had a significant effect on the US economy, the company comments that short-term lease adjustments could be appropriate to ensure the long-term position of itself and its client.
Upon the issuance of guidelines, laws, instructions or similar acts limiting non-essential businesses by different state governments and/or regulatory authorities, operations at tenant’s properties are suspended for an undetermined time-frame as yet.
Vici explained: “All of our tenants fulfilled their rent obligations in full for the month of April. As of April 16, 2020, we are actively engaged in discussions with our five tenants regarding how best to respond to the COVID-19 pandemic as it specifically impacts each tenant’s financial and operating situation.
“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.”
Furthermore, it is not anticipated that the current situation will impact the Eldorado and Caesars multi-billion dollar merger, the latter of which Vici initially started life as a member of.
Under the terms of the deal, Vici is purchasing the property and immovable properties associated with Harrah’s New Orleans, Harrah’s Laughlin, and Harrah’s Atlantic City for $3.2bn, of which $2bn is actually kept in an escrow account.
The company noted, in commenting on its current financial position:“As of April 16, 2020, we have approximately $310m in unrestricted cash and cash equivalents and $1bn of availability under our undrawn revolving credit facility.
“In addition, we have access to approximately $1.3bn in proceeds from settlement of the 65,000,000 shares that are subject to the forward sale agreements entered into in June 2019.”
Edward Pitoniak, CEO of Vici Properties, added: “From day one at Vici 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.
“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. Today we wish to share with you how Vici strengthened itself coming into the pandemic and how we’re currently responding to the pandemic.”