Rio Las Vegas Lands $176.5 Million CPACE Loan

• Peachtree Group provides $176.5 million in financing to Rio casino hotel
• There’s been unsubstantiated chatter about venue’s financial health

Dreamscape Companies, the operator of the Rio Hotel & Casino, procured a $176.5 million Commercial Property Assessed Clean Energy (CPACE) loan from Peachtree Group, prompting some chatter about the venue’s financial sturdiness.

Structured in less than two months, the transaction is the largest in Peachtree’s history and one of the biggest CPACE fundings in US history. The loan is retroactive because it allows Dreamscape to pay off a senior term loan. By tapping CPACE financing for the Rio, Dreamscape garnered the advantage of “allowing 100% of the proceeds to be reimbursed for completed project costs,” according to the lender.

This deal highlights an inflection point for CPACE, with some of the nation’s largest financial institutions consenting to its use because they see the clear benefit to the capital stack,” said Jared Schlosser, head of originations and CPACE for Peachtree. “By closing quickly on a marquee hospitality asset, we were able to strengthen the position of both the owner and its lenders.”

An off-Strip casino hotel, Rio wrapped up a $340 million renovation at the end of 2024. Improvements included the rooms in the Ipanema Tower, the addition of new restaurants, and sprucing up of the casino floor and convention space.

Dreamscape Has Made Substantial Rio Investments

Dreamscape is the owner of the property assets of the Rio. Caesars Entertainment (NASDAQ: CZR) previously operated the venue prior to a $516.3 million sale-leaseback deal struck between the two companies in December 2019.

In February 2023, the New York-based real estate developer said it raised $850 million, a portion of which was directed to bolstering the Rio. Dreamscape has invested mightily in a property that struggled for years before the 2019 sale.

While Rio has made some strides, including joining the World of Hyatt guest loyalty program and revamping its gaming rewards plan, rumors have swirled about the venue’s financial health.

“Rio (owned by Dreamscape) is rumored to be in talks with lenders—sounds like haircut time or possible sale. NBA arena deal falling through with Oak View was a major blow,” said Vital Vegas in an August 16 tweet.

Social media chatter indicates Rio hasn’t refurbished its other hotel tower and that it’s currently on a hiring freeze.

CPACE Market Ramping Up

Whether or not the loans permeate the gaming industry remains to be seen, but data confirm demand for CPACE financing is increasing. The C-PACE Alliance says such financings top $10 billion over the past decade, and growth is expected as more professional investors and lenders embrace that form of lending.

“Peachtree is one of the most active CPACE lenders in the country, with more than $1.5 billion in originations. The firm’s credit platform spans CPACE, bridge, mezzanine, and construction lending, providing creative capital solutions across market cycles,” according to the Atlanta-based firm.