Casino operator Caesars Entertainment Corp. and its real estate investment trust VICI Properties announced Wednesday the sale of Harrah’s Reno Hotel and Casino in downtown Reno to an affiliate of Las Vegas-based real estate group CAI Investments.
Caesars confirmed the sale after news leaked earlier this week. Harrah’s Reno is one of the stars of Nevada’s gambling scene. The property first opened doors in 1937 as a gaming parlor, but closed shortly after and was later on reestablished and expanded into a full-blown hotel-casino.
CAI Investments is set to pay $50 million to acquire the property. VICI will take 75% of those $50 million, while Caesars will collect the remaining 25%. Under the terms of the purchase agreement, Caesars will lease the property from its new owner for the first half of the year.
During this time, Harrah’s Reno will continue to be part of the Las Vegas casino operator’s rewards network. The hotel and casino complex will then be handed to its new owner and will be repurposed as a mixed-use, non-gambling property.
VICI currently owns Harrah’s Reno and Caesars leases it from its REIT, which spun off from the casino operator in the fall of 2017 as a result from a long and complex bankruptcy process. Caesars and VICI said Wednesday that annual rent payments under their Non-CPLV Master Lease will remain unchanged until Harrah’s Reno switches to its new ownership later this year.
Plans for Harrah’s Reno’s Future Revealed
As more and more casinos began to pop up in downtown Reno and their owners kept investing in improvements, Harrah’s Reno saw itself lag behind. Following news about the property’s sale, its new owner quickly revealed its fate once the transaction is finalized.
Harrah’s Reno will be repurposed as a non-gaming mixed-use property that, after its transformation is completed, will feature about 530 market-rate apartments, 150,000 square feet of office space, and more than 78,000 square feet of retail space.
The retail portion of the complex will include new food outlets, a bar, a coffee shop, and a grocery store, among others. Reno City Center, as Harrah’s Reno will be called once it switches to its buyer, will also have a gym and entertainment offerings that will be set in a park-like setting, CAI Investments also revealed.
The property’s new owner said that they aim to provide downtown Reno with much-needed housing and office opportunities that will help the city continue to attract new businesses.
The sale of Harrah’s Reno is subject to the completion of Caesars’ $17.3 billion merger with Reno-headquartered casino operator Eldorado Resorts, as well as to regulatory approvals and other customary closing conditions.
Commenting on the sale of their Reno casino, Caesars CEO Tony Rodio said that they are pleased CAI has showed commitment to the Reno community and “supports the redevelopment of this wonderful asset” and that they have worked closely with Harrah’s Reno’s new owner to “provide a reasonable closure plan that allows our great staff in Reno ample time to secure their next jobs.”
CAI Investments will be working with Gryphon Private Wealth Management as capital partners for the redevelopment of Harrah’s Reno into Reno City Center.
Ideally, the repurposed complex will open doors at the same time as a 20-story boutique hotel CAI Investments is currently building on Court Street in Reno.
The sale of Harrah’s Reno was the second transaction involving Nevada casino properties to be announced this week. Caesars rival MGM Resorts International announced a few days ago that it is selling its MGM Grand and Mandalay Bay resorts on the Las Vegas Strip to New York financial services giant The Blackstone Group in a $4.6 billion deal.
Source: Caesars Entertainment and VICI Properties Inc. Announce Sale of Harrah’s Reno to CAI Investments
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