VICI Properties (NYSE:VICI) has decided to stop a transaction with Caesars Entertainment to acquire 23 acres of land on the Las Vegas Strip. The land is undeveloped, and VICI had previously committed to purchasing the property for $103.5 million. While the deal is not moving forward at this time, it might be revisited at a later date.
Not Moving Forward
Back in June, VICI Properties, a gaming real estate investment trust (REIT), and Caesars had reached an agreement where the landlord would purchase the land for $4.5 million per acre. The land is not currently being used and is close to the Caesars Forum.
When this deal was announced, a separate transaction also took place, one involving VICI providing Eldorado with a five-year mortgage of the Caesars Forum Convention Center, a property located at the Caesars Palace Casino. This deal had a $400 million price tag. Cash from the pacts was supposed to be used to complete the merger of Caesars and Eldorado Resorts.
However, permit issues got in the way and this causes problems with the land purchase being finalized. During a VICI conference call concerning the third-quarter earnings, CEO of the company Ed Pitoniak said that the land had permitting and entitlement issues that related to the parking obligations of Caesars.
According to Pitoniak, it was not going to be easy to solve these issues quickly. Caesars is also still working with integration needs in the merger with Eldorado Resorts. The deal was completed in July with merger and acquisition actions still taking place.
For now, Pitoniak says the acquisition of the land will be set aside. VICI might reconsider after the dust settles post-merger between Eldorado and Caesars. VICI already owns undeveloped land located behind several casinos in Las Vegas including Bally’s and Planet Hollywood. If the company can secure the 23 acres, later on, it would give them 50 total acres to develop on the Strip.