Caesars Entertainment Corp. has signed an agreement to sell the Rio All-Suite Hotel & Casino to a company controlled by a principal of Imperial Cos. for $516.3 million. Caesars will continue to operate the property for a minimum of two years and pay annualized rent of $45 million.
Under the agreement, the buyer has the option to pay Caesars Entertainment $7 million to extend the lease under similar terms for a third year. At the end of the lease term and at the request of the buyer, Caesars Entertainment may continue to manage the property or may provide transition services to the buyer.
The transaction is expected to close in the fourth quarter of 2019 and is subject to regulatory approvals and other customary closing conditions.
The Rio All-Suite Hotel & Casino features 2,522 suites, 114,366 square feet of convention and meeting space, nearly 120,000 square feet of casino space, more than 25,000 square feet of shopping space and numerous restaurants, bars and entertainment venues.
"This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental [earnings before interest, tax, depreciation and amortization] at those properties," Tony Rodio, CEO of Caesars Entertainment, said in a statement. "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 agreement allows for co-ownership of Rio-specific guest data and places no restrictions on Caesars’ marketing activities. The property 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. The World Series of Poker will be hosted at the Rio in 2020 and hosting rights will remain with Caesars Entertainment thereafter.