Flamingo Sale Bell Tolls with No Answer

It’s widely known that Caesars Entertainment (NASDAQ: CZR) is sounding to sell one of its Las Vegas Strip properties — a dealings many industry observers expected to live proclaimed earlier this year.

That word hasn’t hit the wires and as TheStreet.com reports, the cassino monster is bumping upwards against a deadline inwards a previously constituted agreement with VICI Properties (NYSE:VICI). That place escort is sometime this summer, but with simply four days remaining inward the thirdly quarter, the likelihood of Caesars exceeding that clip confine appears elevated.

As you know, we hold an ongoing sales outgrowth for a Strip plus that’s governed past the VICI agreements and ends almost another month to run,” said Caesars CEO Uncle Tom Reeg on the company’s second-quarter earnings conference send for on Aug. 2.

The Caesars/VICI allot was established inward 2019 when Eldorado Resorts — the troupe that acquired “old Caesars” – struck an agreement with the cassino landlord.

In gain to purchasing the soil and existent estate assets of Harrah’s New Orleans, Harrah’s Laughlin, and Harrah’s Atlantic Ocean City, VICI earned some other benefits. Namely, the existent demesne company earned rights of 1st of refusal on the Flamingo Las Vegas, Bally’s Las Vegas, French capital Las Vegas and Planet Hollywood Resort & Casino. The 2nd would include the remainders from that group and the LINQ Hotel & Casino.

Probably Flamingo on the Auction Block

Reports surfaced quint months ago that the Strip plus Caesars is potential shopping is Flamingo and that the manipulator is seeking at to the lowest degree $1 billion.

The companionship hasn’t confirmed that Flamingo is inwards fact the locale that’s on the block, but through and through cognitive operation of deduction, it makes sense. Reportedly, Planet Hollywood was the attribute Caesars was sounding to sell, but direction realized there’s considerable, ongoing time value inward the resort’s concert venue. As TheStreet notes, Caesars is making investments in Bally’s — before long to live the Horseshoe — Harrah’s and Paris.

Interestingly, it’s vulgar knowledge inward the industry that Flamingo is inward demand of some sprucing upwardly as well. As a triple-net existent acres investment bank (REIT), VICI wouldn’t live on the hook for those expenses if it acquires the property. The manipulator of the locale would have on that responsibility.

There’s venture that Flamingo’s demand for enhancements could be keeping buyers at bay, but Reeg said there’s sizeable interestingness inwards the venue.

“For us — and there’s — there are plentitude of interested parties,” he said on the August group discussion call.

Rising Interest Rates Could Be Factor inwards Flamingo Sale

Caesars hasn’t made crystallize that a Flamingo dealing will live a sale-leaseback whereby it sells the real demesne to VICI and continues operating the venue or an outright sale to another suitor. However, the $1 billion rumored asking toll and other recent Strip transactions seem to involve the latter.

Rising interestingness rates could factor out into the equating because some interested buyers may need to finance the purchase and they’ll pay today to perform so than they would make at the bulge out of 2022.

As resultant of those tighter funding conditions, Caesars — assuming it’s noneffervescent shopping Flamingo or another venue — could favor a hard cash buyer, but the figure of suitors try-on that eyeshade may be tapering off and perhaps limited to common soldier equity and some tribal casino operators.