Caesars REIT Buys Harrah’s Las Vegas
Caesars Entertainment is acquiring 18.4 acres on the Las Vegas Strip for a new convention center as part of a $1.14 billion sale of Harrah’s Las Vegas to VICI Properties, the real estate investment trust spun off in the gaming giant’s bankruptcy reorganization.
The all-cash transaction will see VICI take ownership of the real estate assets comprising Harrah’s, which Caesars will lease from VICI and continue to operate as part of its corporate portfolio, including the casino, the hotel and all other operations. The lease will run 15 years initially at an annual rent of $87.4 million that scales up in subsequent years. Caesars will have the option to extend the lease an additional 20 years in five-year increments.
Proceeds from the sale will supply the bulk of the $1.7 billion Caesars is paying to acquire Centaur Holdings and its two Indianapolis-area racinos, Hoosier Park and Indiana Grand. The acquisition, announced last month, will add 4,000 machine gaming and e-table positions to the two casinos Caesars already owns in Indiana.
Caesars President and CEO Mark Frissora said the twin deals “demonstrate our commitment to pursuing growth opportunities while maintaining balance-sheet discipline”.
The convention center parcel is adjacent to Harrah’s, and the agreement calls for VICI ultimately to buy the convention center and lease it back to Caesars to operate. A 300,000-square-foot facility is planned for the center Strip location, outfitted with the latest technologies and the largest column-free ballroom in the United States.