Las Vegas' Rio Casino owner Dreamscape completes $850M raise to remodel property, target new investments

With remodeling plans for its Rio Hotel & Casino Las Vegas property in mind and targeting investment in similar properties, Dreamscape Companies, a New York-based real estate development and investment firm founded by industry veteran Eric Birnbaum, announced Wednesday it has successfully completed an $850 million capital raise managed by Wells Fargo and Raymond James.

The capital raise will finance a multiple-phase renovation of Dreamscape’s first gaming property, the Rio Hotel & Casino. The company will use the financing to "reimagine" the two-tower structure, restoring it into "a premiere resort and casino experience with modernized amenities."

Dreamscape bought the Rio from Caesars Entertainment in 2019 for $516 million. Caesars has continued to manage the property under a deal that ends this year. The property, which opened in 1990, will remain open throughout the renovation, with the company slated to officially take over and manage operations at the resort in 2023.

The capital raised will also launch two independent Dreamscape platforms: Dreamscape Entertainment Properties and Dreamscape Entertainment Integrated Resorts. The first is described as an experiential real estate investment trust (REIT) that will own gaming, hospitality and entertainment assets; while the latter will act as an operator of gaming, hospitality and entertainment assets. Both will focus on investing and operating in "strategically located, high-barrier-to-entry" markets with "asymmetric growth potential," according to a press statement. 

Birnbaum commented: “As Dreamscape continues to evolve and expand, we knew the gaming and entertainment sector would be a natural fit and become a central part of our business. We are passionate about creating dynamic lifestyle experiences. I strongly believe that with our team’s unique development capabilities, investment acumen and deep operating expertise, we are poised to become a differentiated player within this space."

Eric Birnbaum

Lifestyle-oriented real estate and hospitality sit "at the core of Dreamscape's ethos," the firm said. The new platforms, coupled with the upcoming renovation of the Rio, are expected to provide Dreamscape with a foundation to scale within the entertainment and gaming sectors. The company already has a geographically diverse portfolio, owning and operating assets in Nashville, Miami, New York City, Los Angeles, Phoenix, New Orleans, Charleston and Philadelphia.

Duane Bouligny, managing director in Wells Fargo’s Corporate & Investment Banks, said: “The previous year we introduced unexpected and incredibly challenging financial market conditions for gaming and real estate development issuers. Amidst this challenging economic environment, we are pleased to have successfully led the debt capital raise from Dreamscape as the company launches its new gaming and entertainment platforms.”

Steven Loffman, Managing Director at Raymond James, concluded: "Dreamscape is perfectly positioned to continue its current trajectory and achieve its expansion goals. Dreamscape has a unique ability to thoughtfully acquire and then execute with a style that consistently speaks to its targeted customer. The company has significantly increased its already robust portfolio and will continue to do so with this latest round of funding."