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Caesars Sells The Quad, Ballys and Cromwell...

By Chuckmonster on Monday, 3rd March 2014 1:38pm
  » filed under Las Vegas  comments: 9

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Speaking of House of Cards... Caesars Entertainment has sold The Quad, Ballys, The Cromwell and Harrah's New Orleans casinos for a whopping $2.2 billion dollars,... the buyer of these casinos is Caesars Entertainment sub-corporation Caesars Growth Properties.

Yes, folks, you read that right. Caesars Entertainment just sold four of its casinos to itself, profiting $2.2 billion dollars and moving a chunk of their debt to a different spreadsheet.

It appears that Caesars Entertainment CEO's roadshow presentation on their proposed debt hiding methodologies has worked out, giving Loveman's overlords Apollo Global Management and Texas Pacific Group Capital a wide enough berth to get the job done.

I've probably told this story before, but I'll tell it again for those who may have missed it. During the last week of preparation for the second edition of Vegas Internet Mafia Family picnic at Bally's, discussions arose regarding budgeting, wherein Caesars reps asked us to pony up a coupla thousand bucks to pay for this free event. Included in those fees was the cost of using two 8-foot long folding leg tables for the stage presentation, the exact price escapes me but was somewhere in the neighborhood of $200. We declined to pay, and the PR team boss pulled some strings and footed the bill... paying Caesars Entertainment $200 bucks to rent two tables from Caesars Entertainment, realizing a $200 profit for the company. This, in a nutshell, is the foundation upon which Caesars Entertainment's House of Cards is built. As a guy who loves casinos, loves gambling and loves following the business end of casinos, this was a quite an eye opener.

Now we wait for one of the octopussies' other shoes to drop...



Tagged: caesars entertainment   the quad   ballys   cromwell   



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Comments & Discussion:

This is the same company that "owns" the P.Ho and the soon-to-exist Harrah's Baltimore, right? I wonder what other magic tricks are next.

Diving deeper, it seems part of the deal also calls for a $223M renovation at the Quad. (No word on whether that's for the changes already made, or future upgrades to the room and property.)


SOURCE:
In addition, Growth Partners will retain a 50% interest in the management fee revenues to be received by certain subsidiaries of Caesars Entertainment Operating Company, Inc., a wholly-owned subsidiary of Caesars Entertainment, in connection with the management of Bally's Las Vegas, The Cromwell, The Quad (formerly Imperial Palace) and Harrah's New Orleans. With this transaction, CAC is also announcing a $223 million renovation of The Quad.

Read more: http://www.nasdaq.com/article/caesars-growth-partners-to-buy-22-bln-of-assets-from-caesars-entertainment-20140303-00272#ixzz2uwI8YPb8

(Apologies for the triple post.)

That $223M renovation at the Quad *is* for room renovations. According to the link I put in my previous post CET/CGP is moving the property upscale. The "boutique" word was used.

If that figure is true, the renos would be substantial. The last room makeover at Bellagio was only $70mm and that was for 2600 rooms (mind you, they needed less of an overhaul given that they weren't trying to leap-frog star ratings like this Quad overhaul from Imperial Palace rooms will no doubt try to accomplish) Look out Wynn/Encore! http://www.lasvegassun.com/news/2012/jan/04/70-million-renovation-completed-bellagio/

They're gonna have to take those towers down to the steel a la Cromwell. HVAC, plumbing, elevators. The whole thing is sort of a mess up there... seems to be a bit beyond a paint and new carpet job.

The costs also have to include exterior work, as the Impotent Palace faux-Asian stucco look doesn't scream upscale.

2.2B -- really? Amazing price for those properties. I would love to see their P&Ls.

If this works, I'm going to sell my house to me. I really need the money.

I'm curious if anyone else has seen Caesars standard if you gamble some, we'll comp the room availability tighten up, or if it's just a matter of I've been slowly pulling back my play there and things have started to catch up. Currently for me, it seems that if I book 6+ months out, I can still find the comps I'm looking for but for the near term, I'm barely seeing anything (even the Quad).

I know it was only a matter of time before we saw the strip start trying to march back to 2007 prices, I guess I just figured it might take a bit longer.

Very glad to have a renovated downtown as an alternative with all it has to offer.

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