American casino giant Caesars Entertainment Corporation has announced the signing of an agreement that will see it sell its Harrah’s Las Vegas venue to local real estate firm VICI Properties Incorporated for $1.14 billion before immediately leasing the venue back for at least the next 15 years.
Caesars Entertainment Corporation revealed that part of the deal will see it acquire an adjacent 18.4-acre parcel of land from VICI Properties Incorporated for the purposes of constructing a new 300,000 sq ft convention center that is set to feature the nation’s largest column-free ballroom.
The Las Vegas-based casino operator explained that the Harrah’s Las Vegas sale is expected to close before the end of the year and also includes provisions that could see VICI Properties Incorporated buy the completed new convention center before similarly leasing it back to Caesars Entertainment Corporation.
Mark Frissora, President and Chief Executive Officer for Caesars Entertainment Corporation stated that the agreement with VICI Properties Incorporated demonstrates his firm’s ‘commitment to pursuing growth opportunities while maintaining balance-sheet discipline’. He moreover declared that the proceeds from the deal are to serve as ‘the primary source of funds’ for the previously-announced deal to purchase Indiana casino operator Centaur Holdings.
“We expect the sale and lease-back of Harrah’s Las Vegas will allow us to acquire Centaur [Holdings] and develop the convention center without increasing leverage,” read a statement from Frissora. “The sale and lease-back transaction is our first post-emergence transaction with VICI [Properties Incorporated] and maintains Harrah’s Las Vegas’ connectivity to our network, which will create value and provide benefits to our guests.”
Frissora moreover proclaimed that the coming convention center is expected to become ‘a leading destination for meetings on the Las Vegas Strip’ and will serve as ‘another important destination right in the middle of our center-Strip footprint’.
To avoid any doubts, Caesars Entertainment Corporation specifically detailed that post-deal it is to continue operating all of the ‘gaming, hotel operations and all other amenities’ inside Harrah’s Las Vegas with the property remaining part of its network for at least 15 years in exchange for annual rent of $87.4 million. After this, the casino giant will have the option to continue leasing the facility for a 20-year period via four five-year extensions.