Vici Properties have signed a definitive agreement for the acquisition of 49.9% interest in Blackstone Real Estate Income Trust (BREIT), for a total cash consideration of almost $1.27bn.
Vici currently owns more than half the interest in MGM Grand Las Vegas and Mandalay Bay Resort. The transaction will give the company the remaining interest in the joint venture.
Per the deal, the properties located on the south end of the Las Vegas Strip will be subject to “an existing triple-net lease agreement” between MGM Resorts International and the joint venture. The next rental escalation is scheduled for March 1 2023 and will bring in an annual rent total of $310m.
The companies anticipate the deal will conclude during the first quarter of 2023, pending customary closing conditions.
Blackstone President and COO Jon Gray said the company values the Las Vegas market and spoke well of its partnership with Vici.
He commented: “Vici Properties has been an outstanding partner on these assets and we are incredibly pleased to have delivered such exceptional returns for our BREIT investors. Las Vegas continues to be a high conviction market for Blackstone.”
Vici Properties CEO Edward Pitoniak echoed Gray’s sentiments.
He said: “We have been honored to be BREIT’s partner in the MGM Grand Las Vegas / Mandalay Bay joint venture and this transaction further demonstrates the ability of Blackstone and VICI to work together productively, now and in the future.
“We’re excited to further our investment in MGM Grand Las Vegas and Mandalay Bay, two of the largest and highest-quality resorts in what we believe is the leisure and convention destination with the most compelling future demand outlook.
"This transaction also provides us with the opportunity to further grow our partnership with MGM Resorts International as they look to capitalize on the growing vitality of the South Strip.”
Blackstone Real Estate Senior Managing Director Scott Trebilco described the acquisition as an “excellent outcome” for company investors.
He concluded by saying: “The sale of these assets is an excellent outcome for our BREIT investors and enables us to further concentrate BREIT’s portfolio in its highest growth sectors, including logistics and rental housing.”
