VICI enters master lease agreement with IGP over four Pure Canadian casinos in Alberta | Yogonet International

Real estate investment trust (REIT) VICI Properties announced Tuesday an amendment to its master lease agreement with operator Pure Canadian Gaming Corp. in response to the acquisition of that company’s operating assets by Indigenous Gaming Partners (IGP).

VICI had previously acquired the real estate assets of Pure Casino Edmonton, Pure Casino Yellowhead, Pure Casino Calgary, and Pure Casino Lethbridge back in January 2023. At the time, the REIT and the casino operator entered into a triple-net master lease agreement with an annual rent of $16.1 million.

The casino landlord announced that the Pure Canadian master lease will remain unchanged. This includes a base term of 25-years with four 5-year tenant renewal options, escalation of 1.25% per annum in lease year 3, with escalation equal to the greater of 1.5% and Canadian CPI (capped at 2.5%) starting in lease year 4, and a minimum capital expenditure requirement equal to 1.0% of annual net revenue. The agreement is in its second year, with the escalators going into effect on February 1.

IGP is a newly formed entity comprised of five tribal nations (Glooscap First Nation, Millbrook First Nation, Annapolis Valley First Nation, We’koqma’q L’nue’kati, and Paqtnkek Mi’kmaw Nation) to acquire gaming assets across North America. IGP is partnering with Sonco Gaming, which currently manages four gaming properties in Canada and the Maxim Casino in London, to run the casinos

While the master lease remains unchanged, VICI has gained rights of first refusal on future IGP sales of gaming real estate as part of the new agreement. “In connection with entering into the amendment to the PURE Canadian master lease, VICI received a 5-year right of first offer (ROFO) on future sale-leaseback transactions. Any additional properties acquired pursuant to the ROFO will be added to the master lease,” said VICI.

While VICI’s major venues are located in the US, relying mostly on the Las Vegas Strip for a majority of its rental income and revenue, the Alberta properties provide the REIT with geographic diversification. The province of Alberta is the third-largest casino market in Canada behind Ontario and Quebec.