Caesars announces Harrah's Las Vegas sale and leaseback agreement with VICI
Caesars Entertainment announced definitive agreements to sell and leaseback the real estate assets associated with Harrah's Las Vegas to VICI Properties and to acquire adjacent land from VICI to develop a planned new 300,000 square foot convention center. Under the terms of the Harrah's sale agreement, Caesars will receive $1.14B in cash in return for Harrah's Las Vegas' real estate assets. Under the terms of the convention center agreement, Caesars will acquire 18.4 acres of adjacent land from VICI as part of Caesars Entertainment's plan to develop a new 300,000 square-foot convention center. The proceeds of the Harrah's Las Vegas sale will be the primary source of funds for the previously announced purchase of Centaur Holdings. The planned convention center is expected to become a leading destination for meetings on the Las Vegas Strip. Caesars will continue to operate Harrah's Las Vegas, including gaming, hotel operations and all other amenities. As part of the sale and leaseback transaction, Caesars and VICI will enter into a 15-year lease for Harrah's Las Vegas under which Caesars will pay initial annual rent of $87.4M. The rent will increase contractually in subsequent years. VICI has secured committed financing to fund the purchase. Caesars will have the right to require VICI to purchase the convention center and lease it back to Caesars, and in the event Caesars does not exercise its put right, VICI will have an option to acquire the convention center and lease it back to Caesars. The transactions are expected to close by year end.