LAS VEGAS — Caesars Entertainment Corp. (NASDAQ: CZR) has agreed to sell the Rio All-Suite Hotel & Casino for $516.3 million. The buyer is a company controlled by a principal of New York City-based investment firm Imperial Cos.
The property is located on Flamingo Road, two blocks from the highly concentrated stretch of casinos on Las Vegas Boulevard known as the Las Vegas Strip. The Rio features 117,300 square feet of casino space, over 1,000 slot machines and 2,520 hotel rooms.
Caesars will continue to operate the property for a minimum of two years under a triple-net lease, paying annualized rent of $45 million. The buyer has the option to pay Caesars $7 million to extend the lease under similar terms for a third year. At the end of the lease term, Caesars will either continue to manage Rio or provide transition services to the buyer.
The agreement allows for co-ownership of Rio-specific guest data and places no restrictions on Caesars’ marketing activities. The Rio will continue to be part of the Caesars Rewards network during the lease term, and “the transaction is not expected to result in any changes to the guest experience,” according to Caesars.
The World Series of Poker will be hosted at the Rio in 2020, and hosting rights will remain with Caesars Entertainment thereafter. The 2019 edition of the event saw nearly 5,000 poker players competing for their share of an $80.5 million prize pool, according to Poker News.
“This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated (Las Vegas) Strip properties, and is expected to result in incremental EBITDA at those properties,” says Tony Rodio, CEO of Caesars Entertainment. “The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.”
The transaction is expected to close in the fourth quarter, subject to regulatory approvals and other customary closing conditions.
— Jeff Shaw