For $293 million and an 8.3% capitalization rate, VICI Properties buys Foundation Gaming’s properties.

Foundation Gaming & Entertainment, LLC, a casino entertainment company, sold the Fitz Casino & Hotel (“Fitz”) in Tunica, Mississippi, and WaterView Casino & Hotel (“WaterView”) in Vicksburg, Mississippi, to VICI Properties Inc. for $293.4 million. Cash was used.

Foundation Gaming’s subsidiaries signed a “triple-net master lease agreement” for assets. The Foundation master lease’s $24.25 million initial annual rent implies an 8.3% acquisition capitalization rate. The 15-year lease has four 5-year renewal options. Foundation Gaming, the parent company, guarantees tenant compliance with the lease.

Adding to the market-leading products:

In fact, VICI owns Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas, three of the most recognized casinos and resorts on the Las Vegas Strip. Also, Fitz, the trust’s latest acquisition, will add to its already impressive portfolio.

Moreover, Foundation Gaming acquired Fitz in 2018. The 38,500-square-foot casino in Tunica, Mississippi, contains 864 slot machines, 9 table games, 506 hotel rooms, and six restaurants and bars.

WaterView debuted in 1993 and was Vicksburg’s No. 2 asset when Foundation Gaming bought it in 2015. Visitors like the resort’s location on the Mississippi River. Water View has 122 rooms, 650 slots, 10 table games, cafes, and restaurants. Gaming occupies 37,000 square feet.

Attractive capitalization rate:

“We are delighted to engage with the experienced team at Foundation Gaming since they have a track record of producing value in regional gaming markets,” said Danny Valoy, VICI Properties’ Vice President of Acquisitions and Finance. Mississippi is one of the region’s top gaming markets, and we’re thrilled to add Vicksburg to our portfolio at a reasonable capitalization rate.

“This transaction illustrates that VICI can negotiate deals that add value and conclude swiftly to satisfy our partners’ ambitions while also making money for our shareholders,” Valoy said.

Strengthening the foundation for growth:

They also own, operates, and constructs casinos nationwide. Basis Gaming Chairman Allan Solomon believes the unique trust arrangement is a terrific opportunity to improve the foundation for future growth.

Stated, “Our property teams worked hard to allow us to partner with VICI on our two Mississippi locations. That put our organization in a position to flourish in regional gaming.” “We look forward to working with VICI in the future,” Mr. Solomon added. “We’d also want to thank the team at Credit Suisse, which helped us a lot with this purchase.”