VICI, the real-estate investment trust set up as part of the reorganization that brought Caesars Entertainment out from Chapter 11 bankruptcy protection last year, announced that it will purchase two more of Caesars’ properties, the Octavius Hotel Tower at Caesars Palace in Las Vegas and the Harrah’s Philadelphia racino in Chester, Pennsylvania.
VICI will pay a net price of $590 million.
The purchase will bring the number of Caesars Entertainment-managed properties under the REIT’s ownership to 22, including Caesars Palace and most of the Harrah’s, Harvey’s and Horseshoe-branded properties. The REIT also owns four golf courses and 34 acres of undeveloped land on the east side of the Las Vegas Strip.
Caesars Entertainment will continue to operate both properties under long-term leases.
“Octavius Tower will strengthen our footprint on the Las Vegas Strip, Harrah’s Philadelphia will bolster our presence on the East Coast by establishing a foothold in a top gaming market,” VICI CEO Edward Pitoniak said in a statement. “As a REIT, we look to enhance our organic growth in the near term, protect against volatility in our rental income over the long term, and incentivize our tenant to invest capital into the real estate to grow and strengthen their own business.”
The Octavius Tower, built in 2012, has 668 rooms. Harrah’s Philadelphia, opened in 2006 as Harrah’s Chester, has 2,450 slot machines and table games adjacent to a harness racing track on the Delaware River. Caesars will pay VICI $35 million a year in lease payments on the tower, and $21 million the first year on Harrah’s Philadelphia, subject to annual increases.
