MGM Grand Las Vegas Fully Acquired by VICI Properties
It has been revealed that VICI Properties has pounced to acquire the remaining 49.9 percent stock in its joint venture concerning MGM Grand Las Vegas and also, Mandalay Bay Resort.
The reported sum is understood to be in the region of $1.27 billion, with its current partner Blackstone Real Estate Income Trust set to bank this.
Currently, each of these resorts is operated by MGM Resorts International, and, at the minute, it is under a triple net lease agreement until March 1, from when MGM will be required to pay $310 million annually, with 27 years left to run (until 2050). Despite this, though, there are two 10-year year renewal options in this contract.
What Does This Mean for VICI and MGM?
For VICI, this deal represents a considerable coup - a company that specializes in casino property ownership; it means that it further increases its repertoire while solidifying its position on the Las Vegas strip as a major player in the market, with the potential of this opportunity echoed by VICI.
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.
We're excited to further our investment in MGM Grand Las Vegas and Mandalay Bay, two of the largest and highest-quality resorts in what we believe is the leisure and convention destination with the most compelling future demand outlook.
This transaction also provides us with the opportunity to further grow our partnership with MGM Resorts International as they look to capitalize on the growing vitality of the South Strip.
As far as MGM is concerned, nothing effectively changes, and it is business as usual as it seeks to continue growing its operations across the US from both a retail and online standpoint.
Though, with a substantial lease agreement locked in, it means that it will need to continue to grow its brand while also making sure that it can keep getting customers through its doors at both of its properties.
Typically though, many corporate landlords are aware of any material changes in their tenant's businesses, which indicates that both venues are performing strongly and the future growth looks positive.
Both properties span 321,000 square feet and include a total of 191 table games, 2,235 slot machines and electronic table games, 11,000 guest rooms, and suites. Meanwhile, there are also three million gross square feet that include exhibition and meeting accommodation, covering 226 acres across the iconic Las Vegas strip.
Such a deal is likely to do no harm for MGM, with the company able to use the publicity that will come from this wisely in order to promote its venues to new potential customers and, as a result, attract more business with this news likely to be featured across multiple, major media outlets, that are subject to millions of viewers.