MGM Resorts International, MGM Growth Properties LLC and Blackstone Real Estate Income Trust have confirmed the closing of the previously announced transaction for a joint venture formed between MGP and BREIT to acquire the Las Vegas real estate assets of the MGM Grand and Mandalay Bay for $4.6bn.
In addition, BREIT has purchased approximately 4.9 million MGP Class A shares at a price of $30.67 per share.
In connection with the completion of the transaction, MGM Resorts has entered into a long-term triple net master lease for both properties, and will continue to manage, operate and be responsible for all aspects of the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments.
The company has also provided a full corporate guarantee of rent payments and expects to receive net cash proceeds of approximately $2.4bn and approximately $85m in MGP operating partnership units.
Combined with the previously announced Bellagio and Circus Circus Las Vegas transactions, and assuming the redemption of $1.4bn in operating partnership units, these transactions are expected to yield total net cash proceeds to MGM Resorts of $8.2bn.
Outgoing Chairman and CEO Jim Murren previously stated that the announcements represent a key milestone in executing the company’s previously communicated asset-light strategy.