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JACK Casino and JACK Thistledown Racino properties sold in $843 million deal to VICI Properties

Posted at 1:01 PM, Oct 28, 2019
and last updated 2019-10-28 13:15:50-04

CLEVELAND — JACK Entertainment LLC has sold JACK Cleveland Casino and JACK Thistledown Racino properties to VICI Properties, a real-estate investment trust, for $843 million, pending regulatory approval, according to a release from JACK Entertainment.

Under the terms, VICI will enter into a leaseback agreement with JACK Entertainment, which will continue to invest in and operate JACK Cleveland Casino and JACK Thistledown Racino under the same brand and identity the Northeast Ohio community has known since 2016.

“JACK Entertainment looks forward to continuing to operate JACK Cleveland Casino and JACK Thistledown Racino,” said Mark Dunkeson, Chief Executive Officer of JACK Entertainment, in a news release. “The combined efforts of our gaming properties together with the other Cleveland assets operated by our sister companies including the Cavs, Avenue Shops at Tower City and the May Company Building, have created a strong connection to the city and allows us to remain heavily committed to the Cleveland area. We will continue to invest significant capital into these properties which will have a lasting positive impact on the city and Cuyahoga County.”

VICI entered an agreement with JACK Entertainment to acquire 100% of the membership interests of its affiliate that own casino-entitled land and related assess associated with JACK Casino, located in downtown Cleveland and JACK Racino, located in North Randall.

The master lease will have initial total annual rent of $65.9 million, for an implied capitalization rate of 7.8% and an initial term of 15 years with four 5-year tenant renewal options.

“We are excited to partner with the team 1 at JACK Entertainment as they focus on investing and operating in the Cleveland market," said John Payne, President and Chief Operating Officer of VICI Properties, in a news release. "Ohio continues to be one of the healthiest and fastest growing regional gaming markets and we are thrilled to add high-quality, urban real estate to our portfolio at an attractive capitalization rate. This transaction represents another great example of VICI’s ability to creatively source and execute accretive deals that bring value to our shareholders, while furthering our strategic goal to diversify our roster of best-in-class gaming operators.”

JACK Entertainment is part of the Rock Family of Companies, which employs nearly 4,500 team members in the Cleveland area at locations, including Rocket Mortgage FieldHouse, Bedrock and the Cleveland Cavaliers.

The leaseback agreement is expected to be finalized sometime in early 2020.

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