VICI Properties is purchasing the Caesars’ newest tower at the Las Vegas Strip resort and Harrah’s Philadelphia Racetrack and Casino for a net price of $590 million.
The move is part of the new casino industry trend in which real estate investment entities, related companies to major casino/resort operators known as REITs, acquire properties and lease them back to the original owner or another third party.
VICI was created following the Caesars Entertainment bankruptcy reorganization last year. MGM Resorts International and Penn National Gaming are among the major casino/resorts operators who have sold major operations to affiliated REITs and leased them back under long-term agreements.
VICI says the actual purchase price is $749 million reduced by $159 million through lease modifications. Caesars will continue to operate both properties under the terms of long-term leases.
“Octavius Tower will strengthen our footprint on the Las Vegas Strip, Harrah’s Philadelphia will bolster our presence on the East Coast by establishing a foothold in a top gaming market,” VICI CEO Edward Pitoniak said in a statement.
VICI, which was created out of Caesars’ bankruptcy reorganization, owns 20 casinos under Caesars, Horseshoe, Harrah’s and Bally’s brands. VICI also owns four golf courses and 34 acres of undeveloped land adjacent to the Las Vegas Strip.