VICI Properties Inc. announced that it will provide capital to The Venetian Resort Las Vegas for extensive reinvestment projects through VICI’s Partner Property Growth Fund strategy. The investment will fund several projects, including hotel room product renovations, gaming floor optimization and entertainment and convention center enhancements, among others.
VICI has agreed to provide up to $700 million of financing through the Venetian Capital Investment, comprised of $400 million to be drawn in 2024 and an incremental $300 million that The Venetian Resort will have the option, but not the obligation, to draw in whole or in part until November 1, 2026. The initial $400 million investment will be funded in three quarterly draws based on a fixed funding schedule: $100 million in Q2 2024, $150 million in Q3 2024 and $150 million in Q4 2024.
“We are thrilled to continue to grow our partnership with The Venetian Resort by funding impactful expansion projects through our Partner Property Growth Fund,” said John Payne, president and COO of VICI Properties. “Since we acquired this marquee Las Vegas asset alongside funds managed by Apollo Global Management Inc. in 2022, The Venetian Resort operating team has driven impressive performance at the property, and we are excited to be a partner in their innovative efforts to maximize the economic productivity of this iconic asset.”
Annual rent under the existing Venetian Resort lease will increase commencing on the first day of the quarter immediately following each capital funding at a 7.25% yield (the “Incremental Venetian Rent”). The Incremental Venetian Rent will begin escalating annually at 2.0% on March 1, 2029, and commencing on March 1, 2031, will begin escalating on the same terms as the rest of the rent payable under the Venetian Resort Lease with annual escalation equal to the greater of 2.0% or CPI, capped at 3.0%.
The Venetian Capital Investment is expected to be funded with a combination of cash and the partial settlement of outstanding forward equity sale agreements.
