Caesars Entertainment Corporation and VICI Properties have now announced the signing of a new agreement which will see the sale of Harrah’s Reno Hotel and Casino to an affiliate of CAI Investments for a total of $50m.
The proceeds of the transaction will be split 75 per cent to VICI and 25 per cent of the proceeds will go too Caesars. The annual rent payments under the Non-CPLV Master Lease between Caesars and VICI will continue to remain unchanged.
Under the terms of the new agreement, Caesars will continue to operate the property upon closing the transaction. This will then allow Caesars to cease operations at the property during the second half of 2020. When the term comes to its end, Caesars will then deliver the property to the buyer in a new and redeveloped non-gaming hotel with mixed-use development.
Tony Rodio, CEO of Caesars Entertainment said: “We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago. We are pleased the Buyer is committed to the community and supports the redevelopment of this wonderful asset.”
The agreement will also allow for Caesars to retain its guest data and places no restrictions on Caesars’ marketing activities. Reno will continue to be a part of the Caesars Rewards network during the term of short-term lease with Buyer.
“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” added Christopher Beavor, CEO of CAI Investments.
“CAI is excited to be working with Gryphon Private Wealth Management (GPWM) as capital partners for the project. Kirk Walton and Philip Oleson, Principals of GPWM Opportunity Zone Funds, which will be investing the required capital for the project, believe in the long-term growth potential of Reno.”
The transaction is also subject to the closing of the Eldorado/Caesars combination, regulatory approvals and other customary closing conditions.
John Payne, President and COO of VICI Properties concluded: “The sale of Harrah’s Reno demonstrates our ability to continuously work constructively with our tenants to improve our individual businesses.
“This disposition will allow VICI to optimise the quality of our real estate portfolio and redeploy the proceeds towards other attractive growth opportunities while maintaining the existing financial terms of the Non-CPLV Master Lease with Caesars.