VICI Properties Inc. to Acquire Remaining 49.9% Interest in MGM Grand Las Vegas and Mandalay Bay Joint Venture From Blackstone Real Estate Income Trust, Inc.
December 01 2022 - 8:30AM
Business Wire
Blackstone Real Estate Income Trust, Inc. (“BREIT”) and VICI
Properties Inc. (NYSE: VICI) (“VICI Properties” or “VICI”)
announced jointly today that they have entered into a definitive
agreement in which VICI, currently owner of a 50.1% interest in the
joint venture that owns MGM Grand Las Vegas and Mandalay Bay
Resort, will acquire BREIT’s 49.9% interest in the joint venture
for cash consideration of approximately $1.27 billion and VICI’s
assumption of BREIT’s pro-rata share of the existing property-level
debt. The property-level debt has a principal balance of $3.0
billion, matures in 2032, and bears interest at a fixed rate of
3.558% per annum through March 2030.
The properties, situated at the south end of the Las Vegas Strip
in Las Vegas, Nevada, are subject to an existing triple-net lease
agreement between the joint venture and MGM Resorts International
(NYSE: MGM). The lease will generate annual rent of approximately
$310 million upon the commencement of the next rental escalation on
March 1, 2023.
Jon Gray, President and Chief Operating Officer of Blackstone,
said, “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.”
Edward Pitoniak, Chief Executive Officer of VICI Properties,
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.”
Scott Trebilco, Senior Managing Director of Blackstone Real
Estate, said, “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.”
The MGM Grand Las Vegas / Mandalay Bay triple-net lease has a
remaining initial lease term of approximately 27 years (expiring in
2050) with two ten-year tenant renewal options. Rent under the
lease agreement escalates annually at 2.0% through 2035 (year 15 of
the initial lease term) and thereafter at the greater of 2.0% or
CPI (subject to a 3.0% ceiling).
VICI Properties intends to fund the transaction through a
combination of cash on hand, proceeds from the settlement of
existing outstanding forward equity sale agreements and assumption
of the remaining 49.9% of the existing property-level debt. VICI
expects the transaction to be immediately accretive to AFFO per
share upon closing.
The AAA Four Diamond Resorts, MGM Grand Las Vegas and Mandalay
Bay, feature:
- Over 18 million building square feet
- Approximately 11,000 guestrooms and suites (including Four
Seasons and Delano hotels) across the two iconic properties
- Approximately 321,000 square feet of gaming space and 191 table
games and 2,235 slot machines and electronic table games
- Approximately 3.0 million gross square feet of state-of-the-art
exhibition and meeting facilities
- A variety of amenities for its guests, including multiple
Michelin Star winning restaurants, The Mansion at MGM Grand,
numerous entertainment venues, the MGM Grand Garden Arena (with
approximately 17,000 seat capacity), Hakkasan Night Club, Topgolf,
and destination pools and spas
- Situated on 226 well-located acres on the Las Vegas Strip
The transaction is subject to customary closing conditions and
is expected to be completed early in the first quarter of 2023.
PJT Partners and Barclays are serving as BREIT’s financial
advisors, and Simpson Thacher & Bartlett LLP is acting as
BREIT’s legal counsel. Morgan Stanley & Co. LLC is acting as
exclusive financial advisor to VICI Properties, and Hogan Lovells
is serving as legal advisor to VICI Properties.
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 primarily in stabilized, income-generating
U.S. commercial real estate across key property types and to a
lesser extent in real estate debt investments. 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 $319 billion in investor
capital under management. Further information is available at
www.breit.com.
About VICI Properties
VICI Properties Inc. is an S&P 500® experiential real estate
investment trust that owns one of the largest portfolios of
market-leading gaming, hospitality and entertainment destinations,
including Caesars Palace Las Vegas, MGM Grand and the Venetian
Resort Las Vegas, three of the most iconic entertainment facilities
on the Las Vegas Strip. VICI Properties’ national, geographically
diverse portfolio consists of 43 gaming facilities comprising over
122 million square feet and features approximately 58,700 hotel
rooms and more than 450 restaurants, bars, nightclubs and
sportsbooks. Its properties are leased to industry leading gaming
and hospitality operators, including Caesars Entertainment, Inc.,
Century Casinos, Inc., the Eastern Band of Cherokee Indians, Hard
Rock International Inc., JACK Entertainment LLC, MGM Resorts
International, Penn Entertainment, Inc., and The Venetian Las
Vegas. The Company has a growing array of investing and financing
partnerships with leading non-gaming experiential operators,
including Great Wolf Resorts, Cabot, Canyon Ranch and Chelsea
Piers. VICI Properties also owns four championship golf courses and
34 acres of undeveloped and underdeveloped land adjacent to the Las
Vegas Strip. VICI Properties’ strategy is to create the nation’s
highest quality and most productive experiential real estate
portfolio. For additional information, please visit
www.viciproperties.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 VICI’s and BREIT’s
public filings with the Securities and Exchange Commission (the
“SEC”). VICI 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 transaction and
statements regarding future performance, including VICI’s expected
accretion following completion of the transaction. 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 delays or
impediments to completing the transaction and other factors
described in VICI’s periodic reports filed with the SEC as well as
those described under the section entitled “Risk Factors” in
BREIT’s prospectus and its annual report for the most recent fiscal
year and any such updated factors included in its periodic filings
with the SEC, which are accessible on the SEC’s website at
www.sec.gov. In providing forward-looking statements, neither VICI
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 VICI 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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version on businesswire.com: https://www.businesswire.com/news/home/20221201005367/en/
Blackstone Jeffrey Kauth Jeffrey.kauth@Blackstone.com
(212) 583-5395
VICI David Kieske EVP, Chief Financial Officer
DKieske@viciproperties.com
Danny Valoy Vice President, Acquisitions & Finance
DValoy@viciproperties.com
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