Investor Raises $850 Million for Rio Casino

It has been reported that Dreamscape Cos., one of the largest real estate investors in the world, has raised $850 million in order to remodel the Rio Hotel & Casino in Las Vegas and invest in similar properties in other parts of the world. 

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In an interview with BusinessTimes, Dreamscape's CEO and founder, Eric Birnbaum, stated that he has created a real estate investment trust in order to own the resort with its 2,500 rooms. In addition to that, he has also created a company that manages properties. Considering consumer travel is returning to business and leisure travel as consumers return to the state after the holidays, Birnbaum sees a chance to use these vehicles to acquire more gaming and entertainment assets. 

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“We've learned from the pandemic that people crave experiences and connect with others,” he said.

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A real estate investment trust (REIT), which is exempt from corporate income taxes, and has the ability to return the majority of its earnings to its shareholders, has become all the rage in the casino industry. In the United States, there are dozens of casinos owned by trusts such as Vici Properties Inc. and Gaming & Leisure Properties Inc., as well as many famous properties on the Las Vegas Strip as well. 

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For $516 million, Dreamscape purchased Caesars Entertainment Inc.'s Rio Hotel and Casino in 2019. Under a deal that ends this year, Caesars will continue to manage the property. The property, which was opened in 1990, hosted the World Series of Poker for a number of years. 

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Birnbaum said that Dreamscape plans to remodel the Rio with new rooms, restaurants, and entertainment areas. About 85 percent of the money raised will go to the REIT, he said, and the rest will go to the management company. 

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It is understood that pension funds, insurance companies, and individuals with high net worth are among the investors participating in the financing round. In terms of the equity portion of the financing, Raymond James Financial Inc. assisted in the process, while Wells Fargo & Co. assisted with the debt portion of the financing.