Caesars Entertainment Corporation announced it has completed the sale of the real estate assets associated with Harrah’s Philadelphia racetrack and casino in Chester, Pennsylvania to VICI Properties Inc., the real estate investment trust controlled by the operator.
Caesars received $82.5 million in cash in return for Harrah’s Philadelphia’s real estate assets, reflecting a purchase price reduction for the value of certain lease modifications and other aspects of the transaction as part of the previously announced agreement between the two companies.
“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,” said Mark Frissora, president and CEO of Caesars Entertainment.
Caesars leased Harrah’s Philadelphia from VICI pursuant to the existing long-term lease agreement related to other domestic properties, as modified. The property remains a part of the Caesars Entertainment network and continues to benefit from the Harrah’s brand, the Total Rewards loyalty network and access to centralized services.
In connection with the transaction, Caesars and VICI have consummated certain lease modifications to the Caesars Palace Las Vegas (CPLV) and Non-CPLV leases. The modifications are intended to bring the lease terms into alignment with other market precedents and the long-term performance of the properties. The changes moderate volatility in Caesars’ rent payments to VICI while resulting in near-term increases in rent for VICI. The modifications also create additional flexibility to facilitate Caesars’ development ambitions on the east side of the Las Vegas Strip by removing certain impediments associated with those plans.
