Posted on: December 1, 2022, 04:01h.
Final up to date on: December 1, 2022, 05:00h.
VICI Properties (NYSE: VICI) introduced Thursday it’s buying the 49.9% of the Mandalay Bay and MGM Grand on the Las Vegas Strip it doesn’t at the moment personal. That can solidify its standing as the biggest proprietor of gaming actual property on the Strip.
MGM Grand on the Las Vegas Strip. VICI Properties is buying 49.9% curiosity in that venue and Mandalay Bay. (Picture: Eater Vegas)
The gaming actual property funding belief (REIT) is paying $4.27 billion to Blackstone Actual Property Earnings Belief (BREIT) to purchase the 49.9% stakes within the venues. That determine features a money consideration of $1.27 billion and the belief of $3 billion in BREIT debt.
The property-level debt has a principal stability of $3.0 billion, matures in 2032, and bears curiosity at a hard and fast fee of three.558% each year by March 2030,” in keeping with an announcement. “The lease will generate annual lease of roughly $310 million upon the graduation of the following rental escalation on March 1, 2023.”
Each venues are operated by MGM Resorts Worldwide (NYSE: MGM). VICI mentioned it intends to fund the transaction by a mix of money available and the belief of debt. The REIT added the offers will probably be instantly accretive to acquired funds from operations (AFFO).
How VICI Got here to Personal Mandalay Bay, MGM Grand
In January 2020, MGM introduced the sale of Mandalay Bay and MGM Grand to a three way partnership managed by MGM Progress Properties (MGP) and BREIT for $4.6 billion. At the moment, the breakdown was a 50.1% stake to MGP, with BREIT proudly owning the rest.
That fifty.1% was inherited by VICI when it closed its $17.2 billion acquisition of MGM Progress in April — a transaction that created the biggest gaming REIT within the US, in addition to the biggest landlord on the Strip. That each one-stock deal was introduced in August 2021.
Previous to asserting the acquisition of MGP, VICI owned the property belongings of a few of the most venerable Strip venues, together with Caesars Palace, the Venetian, and the Venetian Expo and Conference Heart.
“VICI now owns 10 premier resorts on the Las Vegas Strip, consisting of 1.2 million sq. ft of gaming house, roughly 40,775 lodge rooms, and 5.9 million sq. ft of assembly and conference house,” VICI COO John Payne mentioned when the MGP acquisition closed.
Blackstone Nonetheless Energetic in Las Vegas
BREIT is realizing income on Mandalay Bay and MGM Grand, and that could possibly be the impetus for the sale.
“VICI Properties has been an impressive accomplice on these belongings and we’re extremely happy to have delivered such distinctive returns for our BREIT buyers. Las Vegas continues to be a excessive conviction marketplace for Blackstone,” mentioned President and COO Jon Grey within the assertion.
Certainly, the non-public fairness behemoth stays a serious participant in Strip actual property. BREIT owns the property belongings of the Bellagio and is a part of a consortium that earlier this yr paid $4 billion for the true property of the Cosmopolitan. MGM operates each of these on line casino resorts.