Dreamscape Companies, the New York-based firm that owns the Rio, recently announced a number of big changes for the off-Strip resort, including large-scale renovations and corporate restructuring.
According to a recent press release, the firm has raised $850 million in capital, which will go towards three initiatives: the formation of a real estate investment trust (REIT) that will specialize in gaming and entertainment assets; the formation of an entity that will specialize in gaming operations; and a “multi-phase renovation” of the Rio itself.
The new REIT is to be named Dreamscape Entertainment Properties Inc. and the operational component will be called Dreamscape Entertainment Integrated Resorts Inc. The release described them as being “independent” platforms.
The release gave no details as to how much capital will be allotted towards each investment, and did not give any timeframes.
With regards to the renovations, Dreamscape Founder and CEO Eric Birnbaum told the Las Vegas Review-Journal last year that the property was “underloved,” and needed to be reimagined in every way. He added, however, that the casino still had plenty of “meat on the bones” to be successful long-term.
Now, per the release, it appears that the company is prepared to “reimagine the two-tower structure, restoring it into a premiere resort and casino experience with modernized amenities and an array of offerings that speak to today’s gaming and hospitality consumer.”
Despite the lack of details, the company did assert that the property would remain open throughout the construction process.
As far as the corporate structure is concerned, Caesars Entertainment has maintained the operations of Rio for the last four years and pays an annual rent of $45 million, but Dreamscape said that it is “slated to officially take over and manage operations at the resort in 2023,” presumably through its newly founded entities.
Dreamscape first acquired the property from Caesars for $516.3 million in 2019.
A handful of gaming companies have formed REITs in recent years—the two biggest are Vici Properties, an extension of Caesars, and Gaming and Leisure Properties, which is backed by Penn Entertainment. The two firms now own a large chunk of the most famous Strip properties, including the Venetian, MGM Grand and Mandalay Bay.
Additionally, in a surprising twist, the company also revealed to the Las Vegas Review-Journal that it has been “engaged in a dialogue about a portion of the excess land at the Rio as a potential MLB ballpark for the past several years,” and that it still “remains open” to the possibility.
The property sits on 88.5 acres, a large portion of which is used for covered parking. Neither Dreamscape nor the Oakland Athletics, the team that is involved in the discussions, have commented on the potential deal.
