LAS VEGAS and NEW YORK,
Jan. 14, 2020 /PRNewswire/
-- MGM Growth Properties LLC ("MGP") (NYSE: MGP) and
Blackstone Real Estate Income Trust, Inc. ("BREIT") today announced
that MGP and BREIT have entered into a definitive agreement to form
a new joint venture to acquire the Las
Vegas real estate assets of the MGM Grand and Mandalay Bay
for $4.6 billion. In addition, BREIT
will purchase $150 million in MGP
Class A shares. MGP will own 50.1% of the joint venture, and BREIT
will own 49.9%.
At closing, MGM Resorts International ("MGM Resorts") (NYSE:
MGM) will enter into a long-term triple net master lease for both
properties and provide a full corporate guarantee of rent payments.
MGM Resorts will continue to manage, operate and be responsible for
all aspects of the properties on a day-to-day basis, with the joint
venture owning the properties and receiving rent payments.
"We are pleased to announce this partnership with BREIT, which
illustrates the numerous opportunities available to grow our
business and emphasizes the strong institutional demand for gaming
real estate assets," said James
Stewart, CEO of MGP. "Along with the contemplated cash
redemption of $1.4 billion of MGM's
operating partnership units as announced by MGM, we expect this
transaction to be accretive to AFFO while allowing us to maintain
pro rata net leverage of 5.6x."
Jon Gray, Blackstone President & COO, said, "This
transaction reflects our continuing strong conviction in
Las Vegas. We are pleased to once
again partner with MGM Resorts, a world-class operator, as well as
MGM Growth Properties."
Tyler Henritze, Head of U.S.
Acquisitions for Blackstone Real Estate, said, "Similar to the
Bellagio, owning these two premier Las
Vegas assets under a long-term lease with MGM provides
stable cash flow and excellent downside protection for our BREIT
investors. We look forward to growing our partnership with MGM
Resorts and MGM Growth Properties, a best-in-class company."
Together, the MGM Grand and Mandalay Bay comprise 9,743 rooms,
approximately three million square feet of meeting space and
approximately 300,000 square feet of casino space across 226 acres
on the Las Vegas Strip. MGM Resorts' initial annual rent will be
$292 million. MGP currently owns the
Mandalay Bay real estate, and MGM Resorts currently owns the MGM
Grand real estate.
MGP is a REIT focused on the acquisition, ownership and leasing
of large-scale destination entertainment and leisure resorts.
Blackstone Real Estate has a deep history and expertise in the
Las Vegas real estate market
across office, hospitality and residential asset classes, including
BREIT's recent acquisition of the Bellagio for $4.25 billion.
This transaction is expected to close in the first quarter of
2020, subject to certain customary closing conditions.
Advisors
Morgan Stanley & Co. LLC and Evercore
served as financial advisors to MGM Growth Properties, and Hogan
Lovells US LLP served as legal counsel. Rockefeller Capital
Management acted as financial advisor to the conflicts committee of
the MGP Board of Directors, and Potter Anderson & Corroon LLP
served as legal counsel. Citigroup Global Markets Inc. served as
financial advisor to BREIT. Citigroup Global Markets Inc., Barclays
Capital Real Estate Inc., Deutsche Bank AG, and Societe General
served as BREIT's financing advisors. Simpson Thacher &
Bartlett LLP served as legal counsel to BREIT.
About MGM Growth Properties LLC
MGM Growth Properties
LLC (NYSE: MGP) is one of the leading publicly traded real estate
investment trusts engaged in the acquisition, ownership and leasing
of large-scale destination entertainment and leisure resorts, whose
diverse amenities include casino gaming, hotel, convention, dining,
entertainment and retail offerings. MGP currently owns a portfolio
of properties, consisting of 11 premier destination resorts in
Las Vegas and elsewhere across
the United States, MGM Northfield
Park in Northfield, OH, Empire
Resort Casino in Yonkers, NY, as
well as a retail and entertainment district, The Park in Las
Vegas. As of December 31, 2018,
our destination resorts, the Park, and MGM Northfield Park
collectively comprise approximately 27,400 hotel rooms, 2.7 million
convention square footage, 150 retail outlets, 300 food and
beverage outlets and 20 entertainment venues. As a growth-oriented
public real estate entity, MGP expects its relationship with MGM
Resorts and other entertainment providers to attractively position
MGP for the acquisition of additional properties across the
entertainment, hospitality and leisure industries. For more
information about MGP, visit the Company's website at
http://www.mgmgrowthproperties.com. In addition, MGP has
posted an investor presentation on its website related to the
transaction, which is available at:
https://www.mgmgrowthproperties.com/events-and-presentations/default.aspx.
About Blackstone Real Estate Income Trust
Blackstone
Real Estate Income Trust, Inc. ("BREIT") is a perpetual-life,
institutional quality real estate investment platform that brings
private real estate to income focused investors. BREIT
invests in stabilized, income-generating U.S. commercial real
estate across the key property types and to a lesser extent in real
estate-related securities. BREIT is externally managed by a
subsidiary of Blackstone (NYSE: BX), a global leader in real estate
investing. Blackstone's real estate business was founded in 1991
and has approximately $157 billion in
investor capital under management. Further information is available
at www.breit.com.
Forward-Looking Statements
This press release includes
"forward-looking" statements and "safe harbor statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and/or uncertainties, including those described
in MGP's and BREIT's public filings with the Securities and
Exchange Commission. MGP and BREIT have based
forward-looking statements on current expectations and assumptions
and not on historical facts. Examples of these statements include,
but are not limited to, expectations regarding the closing of the
transaction, any benefits expected to be achieved as a result of
the transactions and statements regarding future performance,
including MGP's expected accretion and pro forma leverage following
completion of the transactions. These forward-looking
statements involve a number of risks and uncertainties. Among the
important factors that could cause actual results to differ
materially from those indicated in such forward-looking statements
include risks related to the receipt of, or delays in obtaining,
any regulatory approvals required to own the properties, or other
delays or impediments to completing the planned joint venture
and entering into the lease and other factors described in MGP's
periodic reports filed with the Securities and Exchange Commission
as well as those described under the section entitled "Risk
Factors" in BRIET's prospectus and its annual report for the most
recent fiscal year and any such updated factors included in its
periodic filings with the Securities and Exchange Commission (the
"SEC"), which are accessible on the SEC's website at
www.sec.gov. In providing forward-looking statements, neither
MGP nor BREIT is undertaking any duty or obligation to update
these statements publicly as a result of new information, future
events or otherwise, except as required by law. If MGP or
BREIT updates one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those other forward-looking statements.
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SOURCE MGM Growth Properties