by Michael J. Shapiro | December 01, 2017
Caesars Entertainment has agreed to sell and lease back the real-estate assets of Harrah's Las Vegas to VICI Properties. As part of the deal, Caesars will acquire from VICI land that is adjacent to Harrah's to develop a new 300,000-square-foot convention center. Caesars will continue to operate all aspects of Harrah's Las Vegas, and the property will remain a part of the Caesars network and Total Rewards loyalty program. 
 
Caesars will get a cash infusion of $1.14 billion from the sale, which will be a primary source of funding not only for the convention center development but also the recently announced acquisition of Centaur Holdings. That deal will add two Indiana properties - Hoosier Park Racing and Casino, and Indiana Grand Racing and Casino - to Caesars' expanding portfolio.
 
In Vegas, the 18.4-acre convention center project would add significant meeting and event space to a center-Strip location, surrounded by Caesars Entertainment hotels. Plans call for the largest column-free ballroom in the country and the latest in technology infrastructure, with the flexibility to accommodate groups of different sizes.
 
"We expect the sale and leaseback of Harrah's Las Vegas will allow us to acquire Centaur and develop the convention center without increasing leverage," noted Caesars Entertainment president and CEO Mark Frissora. "The sale and leaseback transaction is our first post-emergence transaction with VICI and maintains Harrah's Las Vegas' connectivity to our network, which will create value and provide benefits to our guests. The acquisition of the adjacent land and development of the convention center allows us to develop another important destination right in the middle of our center-Strip footprint." 
 
Caesars will enter into a 15-year lease for Harrah's Las Vegas, with the option to extend the lease an additional 20 years via four five-year extensions. Once the convention center is completed, Caesars could require VICI to purchase the property and lease it back; if Caesars elects not to do so, VICI would have the option to acquire the venue and lease it back to Caesars.