Caesars Entertainment Corporation and VICI Properties have now announced the signing of a new agreement that will see a total of $50m sale of Harrah’s Reno Hotel and Casino to a CAI Investments affiliate.
The transaction’s proceeds will be split with 75% to VICI and 25% of the proceeds will go to Caesars. Annual rent payments between Caesars and VICI under the Non-CPLV Master Lease will proceed unchanged.
Caesars will continue to operate the property under the terms of the new agreement after completing the deal. In the second half of 2020, this will then allow Caesars to cease operations at the site. Caesars will then deliver the property to the buyer at a new and redeveloped non-gaming hotel with mixed-use development when the term ends.
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 arrangement will also require Caesars to maintain their guest data and does not impose any limits on marketing activities for Caesars. Reno will continue to be a part of Buyer’s Caesars Rewards network during the short-term lease term.
Christopher Beavor, CEO of CAI Investments said: “Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property.
“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 deal is also subject to the closing of a combination of Eldorado / Caesars, 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.