Rio All-Suite Hotel & Casino
Caesars Entertainment continues to move toward a more asset-light strategy, as the gaming giant has agreed to sell the Rio All-Suite Hotel & Casino to real-estate investment firm Imperial Companies. Imperial will pay $516.3 million for the 2,563-room Las Vegas resort, which Caesars will continue to operate.
Terms of the deal call for a two-year-minimum lease, during which time Caesars will operate Rio and pay $45 million annually in rent for the property. Imperial will then have the option of paying Casesars an additional $7 million to extend the lease terms for a third year. Following the lease agreement, Imperial will have the option to either continue with management under Caesars or have the gaming company transition management services.
Though Rio will remain a part of the Caesars Las Vegas portfolio for at least a couple of years, the West Flamingo Road property has not been part of Caesars prioritized makeovers, as the company instead readies the area around the new Caesars Forum, set to open in 2020. Harrah's, Flamingo, Caesars Palace, The Linq and Paris all have received recent upgrades. "This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties," explained Caesars CEO Tony Rodio.
What's more, Caesars will continue to benefit from big events already booked at Rio through 2020 and beyond. "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," Rodio added.
The sale shouldn't affect the guest experience, according to Caesars. Rio-specific guest data will be co-owned by Caesars and Imperial, with Caesars continuing to operate its Rewards program there in the same manner.