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VICI Properties announces Canyon Ranch Growth Partnership26 July 2023(PRESS RELEASE) -- VICI Properties Inc. an experiential real estate investment trust, today announced the VICI-Canyon Ranch Growth Partnership, a multi-faceted investment partnership to support the growth of Canyon Ranch, a leading provider of holistic, integrative health and wellness guest experiences. The key elements of the partnership include: - Preferred Equity Investment: VICI committed to an up to $150 million preferred equity investment into the controlling entity of Canyon Ranch (“Canyon Ranch”) to support the growth and expansion of the Canyon Ranch EcosystemTM, including enhancing Canyon Ranch’s existing destination wellness resorts, launching the Canyon Ranch wellness clubs and growing the capabilities of the Canyon Ranch digital platform. The preferred equity investment has a term of 10 years and may be redeemed by Canyon Ranch at any time, subject to a redemption premium in the first three years. - Call Right Agreement: VICI entered into a call right agreement whereby VICI will have the option to call the real estate assets of each of Canyon Ranch Tucson and Canyon Ranch Lenox, subject to certain conditions. If the call right(s) are exercised, Canyon Ranch would continue to operate the applicable wellness resort(s) subject to a long-term triple net master lease with VICI. - Right of First Financing: Additionally, VICI entered into a right of first financing pursuant to which VICI will have the first right, but not the obligation, to serve as the real estate capital financing partner for Canyon Ranch with respect to the acquisition, build-out and/or redevelopment of future wellness resorts. - Mortgage Financing: VICI also intends to provide approximately $150 million of mortgage financing secured by Canyon Ranch Tucson and Canyon Ranch Lenox to refinance Canyon Ranch’s existing CMBS debt secured by these two assets. The mortgage financing will have an initial term of two years with three one-year extensions, exercisable at Canyon Ranch’s option, subject to satisfying certain customary extension conditions. Key Comments - Secular Demand Growth – Edward Pitoniak, CEO of VICI Properties: “At VICI we seek to invest in experiential real estate centered on experiences benefitting from longer-term secular tailwinds. We believe wellness is one of the most powerful secular trends of our time, and that Canyon Ranch is one of the best-positioned global brands for capitalizing on growing demand for wellness and life enhancement, domestically and internationally.” - The VICI-Canyon Ranch Growth Partnership – John Goff, Owner of Canyon Ranch: “We are thrilled to partner with the expertise and capital resources of VICI. VICI shares our conviction, our values and our collaborative approach to growing the Canyon Ranch community. This partnership offers Canyon Ranch the potential to accelerate our growth in an ‘asset light’ manner, especially if we are able to capitalize on the robust Canyon Ranch economic model by acquiring with VICI conventional resorts that have high potential for conversion to Canyon Ranch resorts, thereby growing the Canyon Ranch network. Ed and I share conviction that the next few years could be a very promising time to potentially identify and acquire such resorts.” - The Canyon Ranch Growth Opportunity – Jeff Kuster, CEO of Canyon Ranch: “Over the last forty years, Canyon Ranch has been creating transformational customer experiences in wellness. With the support of VICI’s capital, we have the opportunity to further broaden and deepen the Canyon Ranch EcosystemTM of experiential offerings, both geographically and digitally.” - VICI Capital Deployment – David Kieske, EVP & CFO of VICI Properties: “Upon closing the contemplated mortgage financing, VICI will have committed $500 million of capital to Canyon Ranch, including our previously announced agreement to provide up to $200 million of development financing for Canyon Ranch Austin (which comes with a call right on such asset). We are excited to continue to grow our investment in Canyon Ranch with today’s announcement.” The initial $90 million tranche of the preferred equity investment was funded with cash on hand. In addition to this release, the Company has furnished a Transaction Overview presentation, which is available on its website in the "Investors" section, under the menu heading "Events & Presentations" |