MGM Resorts is selling two more Las Vegas properties: the MGM Grand Las Vegas and the Mandalay Bay. As with its previous sales of Bellagio and Circus Circus Las Vegas, the move is part of the company’s new asset-light strategy in which it aims to operate resorts rather than owning them outright.
In the latest deal, a newly formed joint venture between MGM Growth Properties and Blackstone Real Estate Income Trust (REIT) will acquire the MGM Grand Las Vegas and Mandalay Bay real estate assets in a transaction valued at approximately $4.6 billion. MGM will continue to lease both properties.
According to a written statement by Jim Murren, chairman and CEO of MGM Resorts, the asset-light strategy will enable the company to monetize its owned real estate assets while retaining flexibility to pursue its growth initiatives, including Japan and sports betting.
Late last year MGM closed on the sale of the Circus Circus Las Vegas and 37 adjacent acres for $825 million to an affiliate of Treasure Island owner Phil Ruffin. The Bellagio went to another joint venture between MGM and Blackstone REIT.
Together, the MGM Grand and Mandalay Bay comprise 9,743 rooms, approximately three million square feet of meeting space and approximately 300,000 square feet of casino space across 226 acres on the Las Vegas Strip. MGM Resorts' initial annual rent will be $292 million. MGM Growth Properties (MGP) currently owns the Mandalay Bay real estate, and MGM Resorts currently owns the MGM Grand real estate.