Blackstone Sells Off All Stakes in MGM Grand and Mandalay Bay

Blackstone Real Estate Income Trust, Inc. (BREIT) made an official press release announcing the upcoming sale of its remaining MGM Grand Las Vegas and Mandalay Bay Resort stakes. VICI Properties, which currently owns a 50.1% interest, will acquire the remaining 49.9% interest in the joint venture for a cash consideration of roughly $1.27 billion. VICI will also assume the private equity firm’s share of the existing $3 billion property-level debt.

Blackstone Doubles Down on High-Growth Sectors

The sale is a sensible move on Blackstone’s part as the REIT seeks to consolidate its portfolio ahead of the looming instability in the real estate and housing market. By divesting its remaining stakes in the two properties, Blackstone will generate a profit of over $700 million in under three years, marking a solid return on its initial investment.

Blackstone senior managing director Scott Trebilco described the sale as a fantastic outcome for the company, as it would allow them to double down on high-growth sectors like logistics and rental housing. BREIT president and CEO Jon Gray was also optimistic regarding the deal, noting that Blackstone still had substantial interests in Las Vegas.

VICI Properties has been an outstanding partner… and we are incredibly pleased to have delivered such exceptional returns for our… investors.

Jon Gray, Blackstone president and CEO

The transaction should officially complete in Q1 2023, as it needs to go through the customary closing conditions and regulatory approvals. Given that VICI already owns a majority share, the process should proceed without hiccups.

VICI Presses On with Ambitious Acquisition Plans

After the sale officially completes, VICI will consolidate its hold on two profitable and high-profile properties. The AAA Four Diamond Resorts, MGM Grand Las Vegas, and Mandalay Bay are situated on 226 acres at the south end of the Strip, offering 11,000 guestrooms and suites, 321,000 square feet of gaming space, and a variety of quality amenities.

The properties are currently under a lease agreement with MGM Resorts International, which should generate $310 million in rent by 1 March 2023. VICI Properties CEO Edward Pitoniak lauded Blackstone for their reliability as a partner and expressed hope that the two entities would continue their productive cooperation in other ventures.

We’re excited to further our investment in… two of the largest and highest-quality resorts in… the leisure and convention destination with the most compelling future demand outlook.

Edward Pitoniak, VICI Properties CEO

According to Pitoniak, the transaction would also bolster VICI’s partnership with MGM as the operator remains in a prime position to capture the revitalization of the Las Vegas gambling industry.

Acquiring the remaining share in these two high-profile properties is part of VICI’s ongoing focus on boosting growth and expanding its portfolio. The real estate investment trust recently announced its intention to raise $509.9 million by making an underwritten public offering of 16.5 million shares. The extra capital will fund new acquisitions, bolster growth, and improve its existing properties as the company consolidates its position in the real estate market.