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VICI to Acquire Blackstone Stake in Vegas’ MGM Grand, Mandalay Bay Resorts
(Updated with additional information)
Blackstone Real Estate Income Trust, Inc. (BREIT) and VICI Properties Inc. said Thursday that VICI would acquire BREIT’s 49.9% interest in the joint venture that owns MGM Grand Las Vegas and Mandalay Bay Resort. VICI will pay $1.27 billion in cash and assume BREIT’s pro-rata share of the existing $3-billion property-level debt.
Jon Gray, president and COO of Blackstone, said, “VICI Properties has been an outstanding partner on these assets and we are incredibly pleased to have delivered such exceptional returns for our BREIT investors. Las Vegas continues to be a high conviction market for Blackstone.”
That being said, the sale will enable BREIT to focus on its highest growth sectors including logistics and rental housing, said Scott Trebilco, senior managing director of Blackstone Real Estate. The JV was originally formed in early 2020 between BREIT and MGM Growth Properties (MGP), prior to VICI’s 2021 acquisition of MGP.
Al Atero, portfolio manager at Armada ETF Advisors, observed that apart from its sheer size, “Another noteworthy aspect of the deal is that the venture’s attractive debt structure will remain in place, with a fixed interest rate of 3.55% through 2030, a financing cost which could not be replicated in the current environment.”
At VICI, CEO Edward Pitoniak said, “We have been honored to be BREIT’s partner in the MGM Grand Las Vegas / Mandalay Bay joint venture and this transaction further demonstrates the ability of Blackstone and VICI to work together productively, now and in the future.”
Combined, the two properties total 18 million square feet, with 11,000 guestrooms, 321,000 square feet of gaming space and three million square feet of exhibit and meeting space between them. The deal is expected to be completed early in the first quarter of 2023.
- ◦Sale/Acquisition
