Two of the most prominent properties in city history, MGM Grand and Mandalay Bay, will now have completely new ownership in 2023. Per the Las Vegas Review-Journal, casino landlord Vici Properties completed its buyout of the two large resorts earlier this month, further cementing its ownership of huge properties along Las Vegas Boulevard. Vici, which already owned a 50.1 percent stake in MGM Grand and Mandalay Bay, announced earlier this month that it closed its acquisition of the remaining 49.9 percent from financial conglomerate Blackstone.
In this article, SBS will go over some of the latest gaming news coming out of Las Vegas, along with some other thoughts about gaming in Sin City.
In the report, the deal, which was initially announced in December, called for Vici to pay around $1.27 billion in cash to Blackstone and assume Blackstone’s share of the debt on the resorts. Prior to this transaction, both of these resorts were leased to casino chain MGM Resorts International. According to the article and a presentation by Vici, this deal is assuming 49.9 percent of a $3 billion debt load, or nearly $1.5 billion.
Las Vegas has seen a burst of deals the past few years that have shuffled resort property ownership around, with billions of dollars changing hands. However, as the report from the LVRJ pointed out, this has little, if any, visible effect on customers. Casino resorts up and down the Strip are now leased to rent-collecting landlords. By all appearances, Vici, a Caesars Entertainment spinoff, has emerged as the biggest property owner in the famed corridor with more than 600 acres.
As referenced in one article, Vici’s real estate portfolio contains notable resort properties like Caesars Palace, Harrah’s, and The Venetian. Moreover, this also includes several MGM Resorts-operated properties including the Luxor, Excalibur, New York-New York, Park MGM, and The Mirage. Rental rates for these massive hotels are also not cheap per the LVRJ. When the next rent hike kicks in later this year on March 1st, MGM’s annual rent for both the MGM Grand and Mandalay Bay is expected to total around $310 million.
Blackstone, meanwhile, still has a big presence on the Strip, given its ownership of other giant, MGM-operated hotels. The investment giant purchased Bellagio’s real estate for $4.2 billion in 2019 and bought Aria and Vdara’s real estate in 2021 for nearly $3.9 billion. Blackstone also still owns a stake in The Cosmopolitan of Las Vegas’ real estate. It purchased the flashy hotel-casino for $1.73 billion in 2014 and sold it for $5.65 billion in a deal that closed last year. As a whole, real estate ownership along Las Vegas Boulevard has dramatically changed in the past several years, as casino resorts up and down the Strip are now leased to rent-collecting landlords. Though this change in real estate ownership is new for Vegas, the growth of the Southern Nevada city has not seen any noticeable slowdown.
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