Caesars Entertainment Corporation and VICI Properties have signed an agreement to sell Harrah’s Reno Hotel and Casino to an affiliate of CAI Investments for $50m. The proceeds of the transaction will be split 75% to VICI and 25% to Caesars, while the annual rent payments under the Non-CPLV Master Lease between Caesars and VICI will remain unchanged.
Under the terms of the agreement, Caesars will continue to operate the property upon closing of the transaction pursuant to a short-term lease with the buyer, freeing it up to cease operations at the property during the second half of 2020. At the end of the term, the firm will deliver the property to the buyer to be redeveloped into a non-gaming hotel and mixed-use development.
“We recognize the long legacy of Harrah’s in Reno, where the brand began 82 years ago and our role in the community,” said Caesars CEO Tony Rodio. “We are pleased the buyer is committed to the community and supports the redevelopment of this wonderful asset.
“We have worked closely with the buyer to provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs, including priority consideration for relevant openings at our other properties in Nevada, including Lake Tahoe and Las Vegas.”
“The sale of Harrah’s Reno demonstrates our ability to continuously work constructively with our tenants to improve our individual businesses,” said John Payne, President and COO of VICI Properties. “This disposition will allow VICI to optimize the quality of our real estate portfolio and redeploy the proceeds toward other attractive growth opportunities while maintaining the existing financial terms of the Non-CPLV Master Lease with Caesars.”
“Being originally from the Reno/Sparks community, it is with great pride that we are investing in the Reno area by redeveloping this property,” commented Christopher Beavor, CEO of CAI Investments (CAI). “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 agreement allows Caesars to retain its guest data and places no restrictions on its marketing activities. Reno will continue to be part of the Caesars Rewards network during the term of the short-term lease with Buyer. The transaction is subject to the closing of the Eldorado/Caesars combination, regulatory approval and other customary closing conditions.