Blackstone Real Estate Income Trust will acquire the Bellagio for US$4.25 billion through a 95-5 joint venture with MGM and will lease it back to a unit of the casino company for an initial annual rent of US$245 million.
MGM said it would sell Circus Circus Las Vegas to an affiliate of Treasure Island owner Phil Ruffin for US$825 million.
The divestment come nine months after MGM, which had a long-term debt of US$15 billion as of December 2018, formed a committee to evaluate its real estate portfolio amid its move to an asset-light model.
Jim Murren, Chairman and CEO of MGM Resorts International commented: “This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio as a premier asset in gaming and solidifies our status as a premier operator of gaming and entertainment properties.”
“We will use the proceeds from this transaction, together with the proceeds from the pending sale of Circus Circus Las Vegas, to build a fortress balance sheet and return capital to shareholders,” added Murren.
“These transactions enhance the company’s strategic and operational flexibility and reinforce its commitment to targeted new growth opportunities, including securing and investing in one of the integrated resort licenses in Japan and becoming an industry leader in sports betting in the U.S. We remain committed to delivering on our 2020 goals and continue to be on track to achieve our previously announced targets,” he concluded.
Both deals are expected to close in the fourth quarter of 2019.
Source: GMB
