For months now, speculation has swirled regarding Caesars Entertainment and its quest to sell one of its Las Vegas Strip holdings—many have posited, by process of elimination, that it is the Flamingo on the auction block, but progress appears to be stalling as the third quarter of 2022 comes to a close.
Caesars had entered into a previous agreement in 2019 with VICI Properties, a real estate investment trust (REIT), in which VICI acquired the land and assets to three Harrah’s casinos, as well as the rights of first refusal for Caesars’ Strip properties, those being the Flamingo, Paris Las Vegas, Bally’s Las Vegas and Planet Hollywood.
During an earnings call in August, Caesars CEO Tom Reeg told investors, “ we have an ongoing sales process for a Strip asset that’s governed by the VICI agreements and ends about another month to run.” Now that that timeline seems to have expired, some sort of extension is expected to be announced.
The company has never confirmed that it is actively shopping the Flamingo, but reports first surfaced around six months ago that the operator is seeking around $1 billion for the iconic Las Vegas destination. In addition, Caesars has continued to make investments in the other properties listed, whereas the Flamingo, despite its well-known deficiencies, has remained largely untouched.
One could argue that these inherent renovation expenses are the driving force behind the lack of action, but Reeg said on the August call that there are “plenty of interested parties.”
Ongoing economic uncertainties certainly aren’t helping prospects, as rising interest rates will likely limit the number of potential buyers to those who can afford to pay cash.
In that case, private equity firms and large tribal operators stand out as the most likely candidates.
