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Real Estate Transactions
 12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Real Estate Transactions Real Estate Transactions
2024 Transactions
Our significant activities in 2024, in reverse chronological order, are as follows:
Property Acquisitions and Investments
Venetian Capital Investment
On May 1, 2024, we entered into agreements to fund up to $700.0 million of capital investment into the Venetian Resort for extensive reinvestment projects through our Partner Property Growth Fund strategy (the “Venetian Capital Investment”). The Venetian Capital Investment will fund several projects, including hotel room product renovations, gaming floor optimization and entertainment and convention center enhancements, among others, seeking to improve the overall guest experience and enhance the value of the property. The invested capital will earn a return through the addition of incremental rent to the lease agreement for the Venetian Resort (as amended in connection with the Venetian Capital Investment, the “Venetian Lease”).
The up to $700.0 million of funding through the Venetian Capital Investment is comprised of $400.0 million that has already been funded and an incremental $300.0 million that the Venetian Resort will have the option, but not the obligation, to draw in whole or in part until November 1, 2026. The initial $400.0 million investment was funded based on a fixed schedule: $100.0 million was funded in the second quarter of 2024, $150.0 million was funded in the third quarter of 2024 and $150.0 million was funded in the fourth quarter of 2024. The previous Property Growth Fund agreement entered into with the tenant in connection with the Venetian Resort acquisition in 2021 providing for up to $1.0 billion of future development and construction project funding was terminated on May 1, 2024 concurrently with the entry into the agreement to fund the Venetian Capital Investment.
In connection with the Venetian Capital Investment, annual rent under the Venetian Lease increased commencing on the first day of the quarter immediately following each capital funding at a 7.25% yield (the “Incremental Venetian Rent”). In addition to any increase pursuant to the Incremental Venetian Rent, annual rent under the Venetian Lease will begin escalating annually at 2.0% on March 1, 2029 and, commencing on March 1, 2031, will begin escalating on the same terms as the rest of the rent payable under the Venetian Lease with annual escalation equal to the greater of 2.0% or CPI, capped at 3.0%. The aggregate annual rent under the Venetian Lease increased by $29.0 million as a result of the $400.0 million of funding in 2024 under the Venetian Capital Investment.
We determined that the amendment to the Venetian Lease in connection with the Venetian Capital Investment represented a lease modification under ASC 842 pursuant to which we were required to reassess the lease classification. Upon reassessment, we determined that the Venetian Lease continues to meet the definition of a sales-type lease. Accordingly, since the classification remains unchanged, we modified the future minimum lease cash flows to reflect the amendment and prospectively adjusted the discount rate used to recognize income, incorporating the impact of the additional funding and related incremental rent in connection with the Venetian Capital Investment.
Leasing Activity
Indigenous Gaming Partners - PURE Lease Assignment
On December 10, 2024, we entered into an amendment and consented to the assignment of the master lease agreement for the PURE Canadian Portfolio (consisting of PURE Casino Calgary, PURE Casino Edmonton, PURE Casino Lethbridge and PURE Casino Yellowhead) (the “PURE Master Lease”) to an affiliate of Indigenous Gaming Partners Inc. (“IGP”), in connection with the acquisition of the operating assets of PURE Canadian Gaming Corp. by a subsidiary of IGP. The economic terms of the PURE Master Lease remain unchanged.
In connection with the assignment of the PURE Master Lease, we received a 5-year ROFO on future sale-leaseback transactions with IGP. Any additional properties acquired pursuant to the ROFO will be added to the PURE Master Lease.
Real Estate Debt Originations
The following table summarizes our 2024 real estate debt origination activity:
(In thousands)
Investment NameMaximum Principal AmountInvestment TypeCollateral
Great Wolf Mezzanine Loan (1)
$250,000 Mezzanine
Portfolio of nine Great Wolf Lodge resorts across the United States
Chelsea Piers One Madison Loan10,000 Senior Secured LoanCertain equipment of the fitness club at the One Madison building in New York, NY
Homefield Margaritaville Loan (2)
105,000 Senior Secured LoanMargaritaville Resort in Kansas City, Kansas, under development
Total$365,000 
____________________
(1) In connection with the Great Wolf Mezzanine Loan, the $79.5 million mezzanine loan for Great Wolf Lodge Maryland was repaid in full.
(2) Simultaneous with entering into the loan agreement, we entered into a call right agreement that provides us with a call option on (i) the Margaritaville Resort, (ii) the new Homefield Kansas City youth sports training facility, (iii) the new Homefield baseball center, and (iv) the existing Homefield youth sports complex in Olathe, Kansas. We also received a right of first refusal to acquire the real estate of any future Homefield property, should Homefield elect to monetize such assets in a sale-leaseback transaction. If the call option is exercised, all of the properties, including the Margaritaville Resort, will be subject to a single long-term triple-net master lease with us.
One Beverly Hills Mezzanine Loan
Subsequent to year end, on February 19, 2025, we purchased a $300.0 million interest in an existing mezzanine loan related to the development of One Beverly Hills, a landmark 17.5-acre luxury mixed-use development. One Beverly Hills is being developed by Cain International and will be anchored by Aman Beverly Hills and will also include a full-scale refurbishment of The Beverly Hilton, Aman-branded hospitality and residential offerings, and 10 acres of botanical gardens and open space. The development project has already commenced construction and is expected to be completed late 2027.
The mezzanine loan has an initial maturity in March 2026 and has one 12-month extension option subject to certain conditions. We funded the investment with a combination of cash on hand and drawing down funds under our existing Revolving Credit Facility (as defined in Note 7 - Debt).
Significant 2023 Transactions
Property Acquisitions
The following table summarizes our acquisition and leasing activity (each as defined in the column titled “Transaction”) for the year ended December 31, 2023:
($ in millions)
TransactionDateGuarantor Lease AgreementPurchase PriceInitial Annual RentNumber of Properties
Chelsea Piers Sale-Leaseback Transaction (1) (2) (3)
December 18, 2023Chelsea PiersChelsea Piers Lease$342.9 $24.0 1
Lucky Strike Sale-Leaseback Transaction (2) (3)
October 19, 2023Lucky StrikeLucky Strike Master Lease432.9 31.6 38
Century Canadian Portfolio Sale-Leaseback Transaction (2) (3) (4)
September 6, 2023CenturyCentury Master Lease162.5 
(5)
12.7 
(6)
4
Rocky Gap Casino Acquisition (2) (4)
July 5, 2023CenturyCentury Master Lease203.9 15.5 1
Gold Strike Severance LeaseFebruary 15, 2023CNBCNE Gold Strike Lease— 40.0 
(7)
1
MGM Grand/Mandalay Bay JV Interest Acquisition (2)
January 9, 2023MGMMGM Grand/Mandalay Bay Lease2,758.9 
(8)
151.6 
(9)
2
PURE Canadian Gaming Sale-Leaseback Transaction (2) (3)
January 6, 2023
PURE Canadian Gaming (10)
PURE Master Lease200.8 
(11)
16.1 
(12)
4
Total$4,101.9 $291.5 
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(1) Investment represents acquisition of the existing leasehold interest associated with Chelsea Piers from Chelsea Piers L.P. in a sale-leaseback transaction. The $71.5 million outstanding Chelsea Piers loan was repaid in full and terminated in connection with the closing of the acquisition.
(2) We determined that the transaction should be accounted for as an asset acquisition under ASC 805-50 and further, that the respective lease meets the definition of a sales-type lease.
(3) Since we purchased and leased the asset back to the seller under a sale leaseback transaction, control is not considered to have transferred to us under GAAP. Accordingly, the transaction is accounted for as Investments in leases – financing receivables on our Balance Sheets.
(4) We determined that the acquired components of the respective master lease meet the definition of a separate contract under ASC 842. In accordance with this guidance, we are required to separately assess the lease classification apart from the other assets in the respective master lease.
(5) Amount represents USD equivalent to C$221.7 million investment based on the exchange rate at the time of closing.
(6) Amount represents USD equivalent to C$17.3 million rent based on the exchange rate at the time of closing.
(7) Simultaneous with the entrance into the CNE Gold Strike Lease, we entered into an amendment to the MGM Master Lease in order to account for MGM’s divestiture of the operations of Gold Strike and to reduce the annual base rent by $40.0 million.
(8) Amount includes the assumption of BREIT’s $1,497.0 million pro rata share of an aggregate $3.0 billion of property-level debt, which matures in 2032 and bears interest at a fixed rate of 3.558% per annum through March 2030.
(9) Amount represents our pro-rata share of the MGM Grand/Mandalay Bay Lease which had total annual rent of $303.8 million upon closing.
(10) On December 10, 2024, we consented to the assignment of the PURE Master Lease to an affiliate of IGP, in connection with the acquisition of the operating assets of PURE Canadian Gaming Corp. by a subsidiary of IGP.
(11) Amount represents USD equivalent to C$271.9 million investment based on the exchange rate at the time of closing.
(12) Amount represents USD equivalent to C$21.8 million rent based on the exchange rate at the time of closing.
MGM Grand/Mandalay Bay JV Interest Acquisition
On January 9, 2023, we closed on the previously announced acquisition of the remaining 49.9% interest in the MGM Grand/Mandalay Bay JV from BREIT for cash consideration of $1,261.9 million (the “MGM Grand/Mandalay Bay JV Interest Acquisition”). We also assumed BREIT’s $1,497.0 million pro rata share of an aggregate $3.0 billion of property-level debt, which matures in 2032 and bears interest at a fixed rate of 3.558% per annum through March 2030. The cash consideration was funded through a combination of cash on hand and proceeds from the settlement of certain forward sale agreements. The lease agreement for MGM Grand Las Vegas and Mandalay Bay (“MGM Grand/Mandalay Bay Lease”) had an annual rent of $309.9 million at the time of closing, all of which we are entitled to following the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition. The MGM Grand/Mandalay Bay Lease has a remaining initial lease term of approximately 27 years (expiring in 2050) at the time of closing, with two ten-year tenant renewal options. Rent under the MGM Grand/Mandalay Bay Lease escalates annually at 2.0% through 2035 (year 15 of the initial lease term) and thereafter at the greater of 2.0% or the Consumer Price Index (“CPI”) (subject to a 3.0% ceiling). As of December 31, 2022, the MGM Grand/Mandalay Bay JV was accounted for as an equity method investment under the voting interest model within Investment in unconsolidated affiliate on our Balance Sheets.
Simultaneously with closing of the MGM Grand/Mandalay Bay JV Interest Acquisition, as a result of acquiring full ownership, we consolidated the joint venture and determined that the consolidation should be accounted for as an asset acquisition under ASC 805-50. In application of the asset acquisition guidance, we retained the prior cost basis of our 50.1% interest, which we previously acquired in connection with the MGP Transactions (as defined below), and combined such basis to the purchase price of the MGM Grand/Mandalay Bay JV Interest Acquisition.
The following is a summary of our net assets acquired upon consolidation of the MGM Grand/Mandalay Bay JV:
(In thousands)Amount
Carrying value of prior 50.1% interest acquired in connection with the MGP Transactions
$1,458,782 
Consideration paid for MGM Grand/Mandalay Bay JV Interest Acquisition
1,261,882 
Transaction costs14,630 
Total net assets acquired$2,735,294 
Under ASC 805-50, we allocated the net assets acquired by major categories of assets acquired and liabilities assumed using relative fair value. The following is a summary of the allocated relative fair values of the assets acquired and liabilities assumed in the consolidation of the MGM Grand/Mandalay Bay JV:
(In thousands)Amount
Investments in leases – sales-type$5,494,351 
Cash and cash equivalents (1)
9,607 
Debt, net (2)
(2,747,877)
Accrued expenses and deferred revenue (1)
(20,787)
Total net assets acquired$2,735,294 
____________________
(1) Amount represents their current carrying value, which is equal to fair value
(2) Amount represents the fair value of the $3.0 billion principal amount of CMBS debt as of January 9, 2023, which was estimated as a $252.1 million discount to principal value. The fair value of the debt was estimated by modeling the contractual cash flows and discounting them back to the present value using an estimated market yield. Additionally, we considered current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. The inputs used in determining the fair value measurement are considered Level 3 of the fair value hierarchy.
Concurrently with the closing of the MGM Grand/Mandalay Bay JV Interest Acquisition and consolidation of the MGM Grand/Mandalay Bay Lease, we assessed the lease classification of the MGM Grand/Mandalay Bay Lease and determined that it met the definition of a sales-type lease. Accordingly, the relative fair value of the MGM Grand/Mandalay Bay Lease of $5.5 billion was recorded as an Investment in leases – sales-type on our Balance Sheets, net of an initial allowance for estimated credit losses in the amount of $210.0 million.
Real Estate Debt Investments
The following table summarizes our 2023 real estate debt investment activity:
($ in thousands)
Investment NameMaximum Investment AmountInvestment TypeCollateral
Kalahari Virginia Loan$212,200 Mezzanine LoanIndoor waterpark resort in Thornburg, VA under development
Canyon Ranch Preferred Equity Investment150,000 Preferred Equity InvestmentEquity interests in controlling entity of Canyon Ranch
Canyon Ranch Lenox and Tucson Loan140,135 Senior Secured LoanCanyon Ranch Tucson and Canyon Ranch Lenox
Cabot Saint Lucia Loan100,000 Senior Secured LoanLuxury golf resort in Saint Lucia, Virgin Islands
Hard Rock Ottawa Notes85,000 Senior Secured NoteHard Rock Ottawa Hotel & Casino
Cabot Highlands Loan (1)
10,938 Senior Secured LoanLuxury golf resort in the Scottish Highlands
Total$698,273 
____________________
(1) Amount represents USD equivalent to £9.0 million based on the exchange rate at the time of closing.