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POSITION:Article Cat Israel > News > Rio Hotel & Casino Owner Raises $850 Million to Remodel Las Vegas Strip Property

Rio Hotel & Casino Owner Raises $850 Million to Remodel Las Vegas Strip Property

Updated:2024-07-16 14:28    Views:120

Dreamscape Companies LLC., the New York-based real estate investor and owner of the Rio Hotel & Casino in the Las Vegas Strip, has raised $850 million to support the intention to overhaul the Las Vegas resort and invest in further developments of other similar properties.

Fund-raising process:

Funding was managed by pension funds, insurance companies, and individuals; Raymond James Financial Inc. led the equity private placement and Wells Fargo & Co. arranged the debt. Eric Birnbaum, chief executive officer and founder of Dreamscape, said that he has established a real estate investment trust (REIT) to own the Las Vegas resort, as well as two separate companies which will manage gaming, hospitality, and entertainment assets at the property.

Opportunity for further acquisitions:

Dreamscape boasts of being stewards of both creativity and capital developing residential, retail, hospitality, entertainment, and gaming properties, into unique and dynamic environments to maximize value for the investors. Birnbaum, as the founder, considers that the money raised opens an opportunity for the trust to acquire additional gambling and leisure facilities now that customers are back into the comfortable business and leisure travel routine. “The pandemic has taught us that people crave experiences and being with others,” said Birnbaum.

Resort overhaul:

The company bought the Rio Hotel & Casino from Caesars Entertainment Inc. in 2019 for $516 million. At the same time, Dreamscape entered a sale-leaseback deal with Caesars to run the casino with the performance ending this year. The New York-headquartered owner is now planning to transform the two-tower property which was first opened in 1990 to remain a popular home of the World Series of Poker for decades.

According to the investor and the owner, Dreamscape, the two-tower building will be transformed into modern facilities, with the hotel resort and casino space overhauled to offer an unparalleled leisure experience and preserve the history and the feel of the original property opened in 1990.

REIT collections:

Birnbaum said that most of the money raised from pension funds, insurance companies, and high-net-value individuals will go to the real estate investment trust (REIT) established by Birnbaum. Such a trust is exempted from corporate income taxes and provides the acquisition of most of the earnings by shareholders. The remaining portion of the funds, according to the founder, will be passed to the property management company.

The subject of debate:

The formation of REITs has become a subject of debate in the casino industry as some real estate trusts, like Vici Properties Inc. and Gaming & Leisure Properties Inc., hold ownership over a large number of casinos across the US, including many famous properties located in the Las Vegas Strip. However, Dreamscape is planning to place significant investment to refurbish rooms, restaurants, and entertainment facilities of the Rio Hotel & Casino resort to maintain the prestigious image of the famous casino destination as the benchmark of the casino industry.