Caesars completes sale of Rio Hotel Casino in Las Vegas to Eric Birnbaum's firm

Caesars Entertainment Corporation announced Thursday it has completed the previously announced sale of the Rio All-Suite Hotel & Casino to a company affiliated with Dreamscape Companies, which is owned and controlled by Eric Birnbaum, co-founder of the real estate firm Imperial Companies, for $516.3 million —including certain fees, expenses and $40 million in seller financing provided by a Caesars affiliate. Dreamscape acquires, repositions and/or develops hospitality, residential, retail, gaming and entertainment assets.

In connection with the completion of the sale, a Caesars subsidiary entered into a lease with the buyer under which Caesars will continue to operate the property for a minimum of two years and pay annualized rent of $45 million, according to an official news release.

The Dreamscape affiliate has the option to pay Caesars $7 million to extend the lease under similar terms for a third year. At the end of the lease term and at the request of the buyer, Caesars may continue to manage the Rio or may provide transition services to the buyer.

The Rio will continue to be part of the Caesars Rewards network during the lease term, and the transaction is not expected to result in any changes to the guest experience. The World Series of Poker will be hosted at the Rio in 2020 and hosting rights will remain with Caesars Entertainment thereafter. 

"This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental EBITDA at those properties," said Tony Rodio, CEO of Caesars Entertainment, when the agreement was announced in September. "The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars."