One for the books: A record-setting REIT IPO

VICI Properties is no stranger to creating unforgettable, groundbreaking experiences. As one of the country’s premier experiential-asset real estate investment trusts (REITs), VICI owns and develops an extensive portfolio of best-in-class gaming, hospitality and entertainment destinations, providing exceptional customer experiences to all who patronize its establishments. Among the market-leading properties in its real estate portfolio, the company counts various Caesars (including the world-renowned Caesars Palace), Horseshoe, Harrah’s and Bally’s brands, as well as four championship golf courses.

VICI continues to blaze trails and create new milestones in the marketplace. In February 2018, the company completed a record-setting $1.4 billion initial public offering (IPO), the fourth-largest REIT IPO in history and the largest in the hotel and leisure sector, eclipsing MGM Growth Properties, which previously held the top spot. Shares began trading on the New York Stock Exchange on Feb. 1.

This transaction’s magnitude matches the equally impressive scale that the properties in the portfolio collectively represent: 36.6 million square feet of space; more than 15,000 hotel rooms; a collection of more than 150 restaurants, bars and nightclubs; 780,000 square feet of conference and exhibit space; and a staggering 2.1 million square feet of gaming space.

Kramer Levin began representing VICI from its inception in October 2017. But our story begins in 2014 — the year prior to the commencement of Caesars Entertainment Operating Co. Inc.’s Chapter 11 bankruptcy case. Kramer Levin represented holders of more than $3 billion of Caesars-issued first-lien notes — the largest and key creditor constituency — throughout the restructuring. The reorganization split Caesars’ gaming and hotel businesses into two companies: a REIT (VICI) to hold Caesars’ real estate assets, and an operating company to manage its gaming and hotel operations. Kramer Levin subsequently advised VICI on four strategic and capital transactions that simultaneously closed on Dec. 22, 2017:

• A $1.14 billion sale/leaseback transaction to acquire and lease back the land and real property improvements associated with the iconic Harrah’s Las Vegas
• A $73.6 million sale to Caesars of undeveloped land adjacent to the Las Vegas Strip, upon which Caesars intends to construct a 300,000-square-foot convention center
• A $1 billion equity financing in a private placement and agreements for the repurchase of $400 million of Caesars Palace Las Vegas CMBS mezzanine debt
• A $2.6 billion credit agreement and debt refinancing to finance, in part, the Harrah’s Las Vegas purchase

The combined $4.81 billion value of these deals attests to the great trust clients place in Kramer Levin’s ability to deliver world-class counsel and solutions with a view toward future opportunity.