A new joint venture between the Blackstone Real Estate Income Trust and MGM Growth Properties will buy for US$4.6 billion the two iconic Las Vegas Strip complexes, which have more than 9,700 hotel rooms and about 300,000 square feet of casino space combined, the companies said.
MGM Resorts will continue to manage and operate the two properties on a day-to-day basis through a long-term master lease. The joint venture will own the properties and receive rent payments. MGM Resorts will pay an initial annual rent of US$292 million.
MGM Growth Properties — a real estate investment trust largely owned by MGM Resorts — will own 50.1% of the joint venture, while Blackstone’s real estate trust will have a 49.9% stake. The Blackstone trust will also buy US$150 million worth of shares in MGM Growth Properties. The deal is expected to close in the first quarter of this year.
MGM Resorts CEO Jim Murren said the sales are part of the company’s “asset-light” strategy, which has seen it sell off other casinos in recent years. Blackstone bought MGM’s Bellagio casino for US$4.25 billion last year.
“This transaction reflects our continuing strong conviction in Las Vegas,” Jon Gray, Blackstone’s president and chief operating officer, said in a statement.
Source: GMB / New York Post
