VICI Properties Inc. Announces Partnership With Homefield Kansas City in Youth Sports Recreation Campus and Margaritaville Resort

Rhea-AI Summary

VICI Properties Inc. (VICI) announced a construction loan agreement of up to $105 million to fund the development of a Margaritaville Resort in Kansas City, Kansas. The resort is set to open in the Summer of 2025 and will serve as the anchor to the Homefield Development, an ongoing project in Kansas City. VICI also entered into a call right agreement and received a right of first refusal to acquire the real estate of any future Homefield property in a sale leaseback transaction. This marks the beginning of VICI's partnership with Homefield, a vertically integrated operator of youth sports facilities. The transaction also represents VICI's continued investment in the sports sector, following the Company's loan to and subsequent acquisition of the leasehold interest of Chelsea Piers in New York City.

Insights

Real Estate Investment Analyst

The strategic move by VICI Properties to finance the Margaritaville Resort development through a construction loan agreement presents a significant investment in experiential real estate, particularly in the growing niche of integrated sports and entertainment complexes. This decision aligns with broader industry trends where real estate investment trusts (REITs) diversify their portfolios to include unique properties that offer potential for higher foot traffic and occupancy rates.

The inclusion of a call right agreement is a notable aspect of this transaction, as it provides VICI with the option to acquire multiple assets, including the resort and sports facilities. This indicates a forward-thinking approach to asset management, allowing VICI to potentially consolidate ownership and streamline operations under a single triple net master lease, which could result in operational efficiencies and cost savings.

The long-term partnership with Homefield, coupled with the right of first refusal on future Homefield properties, suggests a strategic expansion into the youth sports sector. Given the increasing popularity of youth sports and the central location of Kansas City, this investment could tap into a lucrative market, driving revenue growth for VICI. However, the success of this venture will largely depend on the execution of the development and the sustained demand for such facilities.

Market Research Analyst

The partnership between VICI Properties and Homefield reflects a calculated response to consumer trends favoring experience-driven destinations. By integrating a Margaritaville Resort with youth sports facilities, VICI is capitalizing on the synergy between hospitality and sports tourism. This could attract a diverse demographic, from families attending sports events to leisure travelers seeking the Margaritaville experience.

Market analysis indicates a growing demand for sports tourism and experiential travel, with the youth sports industry alone estimated to be worth billions. The strategic location in Kansas City, known for its sports culture, enhances the project's potential to become a regional draw, possibly boosting local economic activity through increased visitation and spending.

It's important to monitor the development's progress against projected timelines and market conditions leading up to the targeted openings in 2024 and 2025. Any delays or shifts in consumer preferences could impact the expected returns on investment for stakeholders. Additionally, the success of this venture could set a precedent for similar developments in other regions, possibly influencing stock market valuations for companies within the REIT and hospitality sectors.

Hospitality Industry Expert

The Margaritaville brand is synonymous with a laid-back, vacation-like atmosphere, which can be a strong draw for both the resort guests and sports event attendees. The concept of embedding a Margaritaville Resort within a youth sports complex is relatively novel and could provide a competitive edge in the hospitality market. The resort's ability to offer relaxation and entertainment in proximity to sports facilities positions it as an attractive destination for a wide audience.

However, the success of such a venture depends on effective brand integration and the delivery of consistent service quality across the different aspects of the development. The Margaritaville lifestyle brand must be carefully woven into the sports complex to create a cohesive experience that resonates with both athletes and leisure travelers.

Furthermore, the operational complexities of managing a hybrid property that caters to diverse needs must not be underestimated. The management team will need to balance the requirements of sports events with those of resort operations, ensuring that service standards are met without compromising the guest experience. Effective marketing strategies will be critical in promoting the dual nature of the property and maximizing its revenue potential.

NEW YORK--(BUSINESS WIRE)-- VICI Properties Inc. (NYSE: VICI) (“VICI Properties”, “VICI” or the “Company”), an experiential real estate investment trust, announced today that the Company has entered into a construction loan agreement for up to $105 million in financing to affiliates of Homefield Kansas City (“Homefield”) to fund the development of a Margaritaville Resort in Kansas City, Kansas. The construction loan has an initial term of 3 years with three 12-month extension options, subject to certain conditions.

The Margaritaville Resort, set to open in the Summer of 2025, will serve as the anchor to the Homefield Development, an ongoing project in Kansas City, Kansas, and serve as the hub for Homefield’s new youth sports training facility and baseball center that are currently under development within the Homefield Resort campus, with targeted openings in Spring of 2024 for both assets.

Simultaneous with entering into the loan agreement, VICI entered into a call right agreement that provides VICI with a call option on (i) the Margaritaville Resort, (ii) the new Homefield youth sports training facility, (iii) the new Homefield baseball center, and (iv) the existing Homefield youth sports complex in Olathe, Kansas. VICI also received a right of first refusal to acquire the real estate of any future Homefield property in a sale leaseback transaction, should Homefield elect to monetize such assets. If the call right is exercised, all of the properties, including the Margaritaville Resort, will be subject to a single long-term triple net master lease with VICI.

This transaction marks the beginning of VICI’s partnership with Homefield, a vertically integrated operator of youth sports facilities focused on delivering a professional-grade experience to athletes, parents and fans. This transaction also represents VICI’s continued investment in the sports sector, following the Company’s loan to and subsequent acquisition of the leasehold interest of Chelsea Piers in New York City.

John Payne, President & COO of VICI Properties, said, “We are excited to initiate this partnership with the Homefield team as we continue to have high conviction around youth sports. Kevin Kitson, VP and Associate General Counsel at VICI, Erin Ferreri, VP of Finance at VICI and I spent extensive time with the Homefield team and have helped cultivate what is the beginning of a long-term partnership with a leading operator. Homefield's integrated sports campus and embedded Margaritaville Resort will present a differentiated experiential product with multiple revenue drivers that addresses the youth sports demand in the vibrant Kansas City market.”

Under the joint leadership and ownership of Greg Maday, Trey Bowen and Matt Bowen, Homefield is set to embark on an exciting new venture with VICI. Greg Maday commented, “We are thrilled to partner with the VICI team as we execute our growth strategy in youth sports. Kansas City’s central location in the U.S. and established professional sports presence has rendered it a natural hub for youth sports events and tournaments, and VICI’s capital will be essential in allowing us to build best-in-class infrastructure to meet the present and growing demand for youth sports centers in the area.” Homefield’s Executive Director and development partner is Richard Napper and the Margaritaville Resort development partner is Sunflower Development Group, LLC, led by Jason Swords and Mark Moberly.

“After a careful market and site selection evaluation, we are excited to build upon our Midwest footprint with a new Margaritaville Resort in Kansas City,” said John Cohlan, CEO of Margaritaville Holdings. “We are delighted VICI is a financing partner in such an iconic project as VICI’s team understands our business and the Margaritaville lifestyle well. We look forward to continuing to work with them as we bring this resort to the Kansas City community.”

In addition to this release, the Company has furnished a Transaction Overview presentation available on VICI’s website in the “Investors” section, under the menu heading “Events & Presentations.” For the presentation, please visit https://investors.viciproperties.com/events-and-presentations/.

About VICI Properties

VICI Properties Inc. is an S&P 500® experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality and entertainment destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, three of the most iconic entertainment facilities on the Las Vegas Strip. VICI Properties owns 93 experiential assets across a geographically diverse portfolio consisting of 54 gaming properties and 39 non-gaming experiential properties across the United States and Canada. The portfolio is comprised of approximately 127 million square feet and features approximately 60,300 hotel rooms and over 500 restaurants, bars, nightclubs and sportsbooks. Its properties are occupied by industry-leading gaming, leisure and hospitality operators under long-term, triple-net lease agreements. VICI Properties has a growing array of real estate and financing partnerships with leading non-gaming experiential operators, including Bowlero, Cabot, Canyon Ranch, Chelsea Piers, Great Wolf Resorts, Homefield, and Kalahari Resorts and Conventions. VICI Properties also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip. VICI Properties’ goal is to create the highest quality and most productive experiential real estate portfolio through a strategy of partnering with the highest quality experiential place makers and operators. For additional information, please visit www.viciproperties.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” “will,” and similar expressions that do not relate to historical matters. All statements other than statements of historical fact are forward-looking statements. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond VICI’s control and could materially affect actual results, performance, or achievements. Among those risks, uncertainties and other factors are risks that VICI may not achieve the benefits contemplated by the Homefield transaction as described herein, including with respect to our ability to exercise our future call rights or entry into any future sale leaseback or other transactions between VICI and Homefield, including pursuant to the Company’s right of first refusal, or the anticipated benefits thereof. Additional important risk factors that may affect VICI’s business, results of operations and financial position (including those stemming from changes in economic conditions and risks relating to VICI’s pending and recently completed transactions) are detailed from time to time in VICI’s filings with the Securities and Exchange Commission. VICI does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123600298/en/

Investors:

Investors@viciproperties.com

(646) 949-4631

Or

David Kieske

EVP, Chief Financial Officer

DKieske@viciproperties.com

Moira McCloskey

SVP, Capital Markets

MMccloskey@viciproperties.com

Source: VICI Properties Inc.

FAQ

What is the amount of the construction loan agreement announced by VICI Properties Inc.?

VICI Properties Inc. announced a construction loan agreement for up to $105 million.

When is the Margaritaville Resort in Kansas City, Kansas set to open?

The Margaritaville Resort is set to open in the Summer of 2025.

What did VICI Properties enter into simultaneous with the loan agreement?

VICI entered into a call right agreement and received a right of first refusal to acquire the real estate of any future Homefield property in a sale leaseback transaction.

What does the transaction mark for VICI Properties in terms of partnership?

The transaction marks the beginning of VICI's partnership with Homefield, a vertically integrated operator of youth sports facilities.

What sector does the transaction represent VICI's continued investment in?

The transaction represents VICI's continued investment in the sports sector.