The new VICI-Canyon Ranch Growth Partnership is a multi-faceted investment partnership to support the growth of Canyon Ranch.
Enhancing existing destinations
VICI committed to an up to US$150 million preferred equity investment into the controlling entity of Canyon Ranch to support the expansion of the Fort Worth, Texas headquartered brand’s ecosystem, including enhancing Canyon Ranch’s existing destination wellness resorts, launching the Canyon Ranch wellness clubs and growing the capabilities of the brand’s digital platform.
The preferred equity investment has a term of 10 years and may be redeemed by Canyon Ranch at any time, subject to a redemption premium in the first three years.
Additionally, through the deal, VICI has the right of first financing to serve as the real estate capital financing partner for Canyon Ranch for the acquisition, build-out and/or redevelopment of future wellness resorts.
Edward Pitoniak, CEO of VICI Properties, said: “At VICI we seek to invest in experiential real estate centred on experiences benefitting from longer-term secular tailwinds. We believe wellness is one of the most powerful secular trends of our time, and that Canyon Ranch is one of the best-positioned global brands for capitalising on growing demand for wellness and life enhancement, domestically and internationally.”
Potential for acceleration
John Goff, owner of Canyon Ranch, commented: “We are thrilled to partner with the expertise and capital resources of VICI. VICI shares our conviction, our values and our collaborative approach to growing the Canyon Ranch community. This partnership offers Canyon Ranch the potential to accelerate our growth in an ‘asset light’ manner, especially if we are able to capitalise on the robust Canyon Ranch economic model by acquiring with VICI conventional resorts that have high potential for conversion to Canyon Ranch resorts, thereby growing the Canyon Ranch network. Ed and I share conviction that the next few years could be a very promising time to potentially identify and acquire such resorts.”
Jeff Kuster, CEO of Canyon Ranch added: “Over the last 40 years, Canyon Ranch has been creating transformational customer experiences in wellness. With the support of VICI’s capital, we have the opportunity to further broaden and deepen the Canyon Ranch ecosystem of experiential offerings, both geographically and digitally.”
In the pipeline
David Kieske, EVP and CFO of VICI Properties: “Upon closing the contemplated mortgage financing, VICI will have committed US$500 million of capital to Canyon Ranch, including our previously announced agreement to provide up to US$200 million of development financing for Canyon Ranch Austin. We are excited to continue to grow our investment in Canyon Ranch with today’s announcement.”