Caesars Entertainment Corporation has announced that it has entered into definitive purchase and sale agreements with VICI Properties Inc, related to previously declared acquisitions of two estate assets owned by the company.

Firstly is the Octavius Tower at Caesars Palace Las Vegas (CPLV) which has been purchased for $507.7m, with all of the land and real estate assets associated set to be leased back to Caesars, who will continue its operation, for an annual fee in the region of $35m.

In addition is the $82.5m purchase of Caesars’ real estate assets associated with Harrah’s Philadelphia, which is to be leased back from VICI “pursuant to the existing long-term lease agreement relating to other domestic properties”.

Mark Frissora, President and Chief Executive Officer of Caesars Entertainment, commented: These agreements with VICI unlock more than $500 million in value from our real estate assets to support value-adding growth opportunities and reduce the volatility of our future rent payments, demonstrating our commitment to create value for our shareholders while maintaining financial discipline.”

In its corporate statement, Caesars revealed further details of its deal with VICI regarding Harrah’s Philadelphia: “In connection with the Harrah’s Philadelphia transaction, Caesars and VICI will consummate certain lease modifications to the CPLV and Non-CPLV leases. The modifications are intended to bring the lease terms into alignment with other market precedents and the long-term performance of the properties.

“This will result in near-term increases in rent for VICI as well as the addition of new assets, while moderating changes to Caesars’ long-term rent payments and potential significant volatility in Caesars’ rent payments to VICI.

“The modifications are also expected to create additional flexibility to facilitate Caesars’ development ambitions on the East Side of the Las Vegas Strip by removing certain impediments associated with those plans.

“The Harrah’s Philadelphia transaction and lease modifications are expected to close during the fourth quarter of 2018, subject to customary closing conditions and government and third party approvals.”