LAS VEGAS—Blackstone Real Estate Income Trust and MGM Growth Properties have struck a deal for Blackstone to acquire a 49.9% stake in the MGM Grand and Mandalay Bay for $4.6 billion. In addition, BREIT will purchase $150 million in MGP Class A shares.

At closing, MGM Resorts International will enter into a long-term triple net master lease for both properties. MGM Resorts will continue to operate the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments.

The deal will allow MGP to maintain pro rata net leverage of 5.6x, says CEO James Stewart in prepared remarks.

This transaction follows a deal struck last October between Blackstone Real Estate Income Trust and MGM Resorts International for Blackstone to acquire the Bellagio for $4.25 billion, leasing it back to a subsidiary of MGM Resorts for initial annual rent of $245 million. In this case, MGM Resorts received a 5% equity interest in the joint venture.

Together, the MGM Grand and Mandalay Bay comprise 9,743 rooms, three million square feet of meeting space and 300,000 square feet of casino space across 226 acres on the Las Vegas Strip. MGM Resorts' initial annual rent will be $292 million.

This transaction is expected to close in the first quarter of 2020, subject to certain customary closing conditions.

Instant Insights /

Blackstone Buys Stake in MGM Grand, Mandalay Bay for $4.6B

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