Gets Five-year Option To Purchase Property
A subsidiary of Rick's Cabaret International, Inc. (Nasdaq: RICK), the publicly traded hospitality company that operates restaurants and gentlemen's clubs nationwide, has closed a transaction involving the air rights above the upscale Rick's Cabaret/New York club at 50 West 33rd Street. The subsidiary entered into a contract to buy the land and building for $10 million at any time in the next five years and, simultaneously, the residential air rights for the property were sold to a third party.
The transactions are part of a previously announced transaction under which the company agreed to purchase the land and building for $23 million.
The new agreement also amends the lease for the three-story building at 50 West 33rd Street to $100,000 per month for the next five years rather than the $180,000 per month called for in the original agreement.
"The terms of the new agreement are more favorable to us than our original agreement, giving us more flexibility but also assuring us that we retain control over the property, which is a vital concern for any gentlemen's club," said Eric Langan, president and CEO of Rick's Cabaret International, Inc.
Rick's Cabaret/New York is located in the heart of midtown Manhattan, across the street from the Empire State Building and just a block from the completely transformed Madison Square Garden and busy Penn Station. The club's main cabaret is on the first floor, its upscale steakhouse restaurant and balcony seating are on the second floor, and the VIP area with plush champagne suites are on the third floor, topped off by a smoking deck on the roof.
The real estate transaction is the latest in a series of recent announcements by Rick's Cabaret International. Earlier this month the company announced that a subsidiary has purchased property in Beaumont, Texas, near I-10 where it will open a restaurant and sports bar in the near future. It also announced that another subsidiary purchased 49 percent of a corporation that operates the Dallas gentlemen's club PT's Platinum. Previously the company opened a new gentlemen's club, Temptations Beaumont in Beaumont; launched Vivid Cabaret/LA in Los Angeles; opened the Nascar-themed Ricky Bobby Sports Saloon restaurant/nightclub in Ft. Worth, which has become an instant hit; and announced plans to open Vivid Cabaret/NYC in December.
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