Las Vegas-headquartered, Caesars Entertainment Corporation (NASDAQ: CZR), announced Wednesday that it has finalized the sale of the real estate assets associated with racino, Harrah’s Philadelphia, to real estate investment trust, VICI Properties Inc.
According to the official press release…
The American gaming corporation received $82.5 million in cash for the real estate assets of the casino and racetrack on the Chester, Pennsylvania waterfront. The figure reflects a reduction in the purchase price for the value of particular lease modifications along with other aspects of the deal as part of the previously revealed agreement between Caesars and VICI.
“commitment to creating value”
President and Chief Executive Officer for Caesars Entertainment, Mark Frissora (pictured, right) said…
“The completion of this transaction with VICI provides Caesars with financial flexibility and reduces the volatility of our future rent payments, demonstrating our commitment to creating value for our shareholders while maintaining financial discipline.”
The same day it reported third-quarter earnings, Caesars announced in November that Frissora would be stepping down from his role at the company on February 8 next year.
However, according to recent reports, Caesars has negotiated a delay in the 63-year-olds departure date until at least until April 30, 2019, and possibly a month past that.
Harrah’s Philadelphia was leased by Caesars from VICI in accordance with ‘the existing long-term lease agreement related to other domestic properties, as modified (“Non-CPLV”),’ according to the press release. The casino that was built on the site of the former Sun Shipbuilding campus remains a part of Caesars network and still benefits from the Harrah’s brand, access to centralized services and the Total Rewards loyalty network.
VICI and Caesars have, in connection with the transaction, satisfied certain changes to the lease to the Caesars Palace Las Vegas (“CPLV”) and Non-CPLV leases. The changes are meant to bring the terms of the lease into alignment with the long-term performance of the properties and with other market precedents.
‘The changes moderate volatility in Caesars’ rent payments to VICI while resulting in near-term increases in rent for VICI,’ while also creating more flexibility to help ease Caesars’ development ambitions on the East Side of the Las Vegas Strip by the removal of certain roadblocks associated with those plans.