VICI to acquire remaining 49.9% interest in MGM Grand, Mandalay from BREIT

Blackstone Real Estate Income Trust, BREIT, a subsidiary of Blackstone (BX), and VICI Properties (VICI) announced jointly 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 $1.27B 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 $3.0B, 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 (MGM). The lease will generate annual rent of approximately $310 million upon the commencement of the next rental escalation on March 1, 2023. 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." 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. 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. The transaction is subject to customary closing conditions and is expected to be completed early in the first quarter of 2023.