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Deals & Dealmakers

Blackstone places $4.25B bet on Las Vegas Bellagio

MGM Resorts will sign a long-term lease and continue to be responsible for all operations and capital expenditures of the Bellagio.

Blackstone Real Estate Income Trust and MGM Resorts International announced that BREIT and MGM Resorts will form a 95.5 percent BREIT-led joint venture to acquire the real estate assets of the Bellagio for $4.25 billion in a sale-leaseback transaction.

As part of the transaction, MGM Resorts will lease the property from the joint venture and continue to manage, operate and be responsible for all aspects of the property on a day-to-day basis.

MGM Resorts will sign a long-term lease and continue to be responsible for all operations and capital expenditures of the Bellagio, with the joint venture owning the property and receiving rent payments.

Jon Gray, Blackstone President & COO, said: “As big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio on behalf of our BREIT investors. We look forward to a long and productive partnership with this world-class company.”

Jim Murren, Chief Executive Officer of MGM Resorts, said: “This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio as a premier asset in gaming and solidifies our status as a premier operator of gaming and entertainment properties. We look forward to partnering with Blackstone on this asset and believe that this transaction will create significant value for our shareholders.”

Blackstone Real Estate has a history and expertise in the Las Vegas real estate market across asset classes including office, hospitality and residential.

The sale is expected to close by year end and is subject to customary closing conditions.

Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts and PJT Advisors and J.P. Morgan served as financial advisors to MGM Resorts.

Citigroup Global Markets Inc. and Morgan Stanley & Co served as financial advisors to BREIT. Morgan Stanley & Co, J.P. Morgan, and Citigroup Global Markets Inc. served as BREIT’s financing advisors.

Simpson Thacher & Bartlett LLP served as legal counsel to BREIT.

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