Vici Properties has reached a $843.3 m deal with Jack Entertainment that will see the company purchase two Ohio-based companies.
Vici is to buy 100 percent of partners controlling casino-owned land and real estate and associated assets related to Jack Cleveland Casino, located in downtown Cleveland, and Jack Thistledown Racino, located in North Randall City.
John Payne, president and chief operating officer of Vici Properties said: “We are excited to partner with the team at Jack Entertainment as they focus on investing and operating in the Cleveland market.
“Ohio continues to be one of the healthiest and fastest growing regional gaming markets and we are thrilled to add high-quality, urban real estate to our portfolio at an attractive capitalisation rate.
“This transaction represents another great example of Vici’s ability to creatively source and execute accretive deals that bring value to our shareholders, while furthering our strategic goal to diversify our roster of best-in-class gaming operators.”
Vici will enter into a triple-net lease agreement with Jack Entertainment concurrently with the closing of the deal, which is expected to be subject to regulatory approvals and customary closing conditions in early 2020.
Operating at an initial 15-year term, the master lease will have an initial total annual rent of $65.9 m, with four5-year tenancy renewal options.
“Jack Entertainment looks forward to continuing to operate Jack Cleveland Casino and Jack Thistledown Racino,” explained Mark Dunkeson, Chief Executive Officer of Jack Entertainment.
“The combined efforts of our gaming properties together with the other Cleveland assets operated by our sister companies including the Cleveland Cavaliers, Avenue Shops at Tower City and the May Company Building, have created a strong connection to the city and allows us to remain heavily committed to the Cleveland area.
“We have invested more than $700m into Jack Cleveland Casino and Jack Thistledown Racino since the properties opened in 2012, and we will continue to invest significant capital into these properties which will have a lasting positive impact on the city and Cuyahoga County.”
Opened in May 2012, Jack Cleveland Casino offers 96,000 square feet of gaming space, 1,300 gaming machines, over 120 table games and eight hospitality outlets.
Opened in April 2013, Jack Thistledown Racino is located on 129 acres with around 57,000 square feet of gaming space, 1,459 gaming machines and six hospitality outlets.