Blackstone’s REIT Purchases Bellagio from MGM Resorts for $4.25 Billion
November 19, 2019 | Sherri Kightlinger | Blue Vault
The Blackstone Group Inc.‘s Blackstone Real Estate Income Trust Inc. completed the $4.25 billion acquisition of the real estate assets of the Bellagio in Las Vegas from MGM Resorts International on November 18, 2019. Through the deal, the two companies formed a 95/5 joint venture that would lease the Bellagio back to MGM Resorts for an annual rent of $245 million. MGM Resorts will continue to manage and operate the Bellagio.
Bellagio is a resort, luxury hotel, and casino on the Las Vegas Strip. It first opened on October 15, 1998. Construction began on the hotel in May 1996. When it opened, it was the most expensive hotel ever built with an original design and construction cost of $1.6 billion. It is famous for its lavish design and features over 3,900 rooms and an 8-acre lake with the most famous performer in Las Vegas – the Fountains of Bellagio. These seemingly magical water fountains have daily dazzling light shows synchronized to music.
In 2000, Bellagio became an MGM Mirage property when Mirage Resorts merged with MGM Grand Inc. to create MGM Mirage. In 2010, the company was renamed MGM Resorts International in a move to go worldwide with its brands. Bellagio employs approximately 10,000 people.
According to the Las Vegas Review Journal, the sale appears to be the highest price ever for a Las Vegas resort. The closest sale was the $1.73 billion purchase of The Cosmopolitan of Las Vegas in 2014 — also by Blackstone, a New York financial giant that has been on a real estate buying binge in Southern Nevada for years.
Blue Vault reports that as of September 30, 2019, Blackstone Real Estate Income Trust, Inc., a nontraded REIT, had a portfolio consisting of 1,022 properties and had 181 positions in real estate-related securities and loans. The Company currently operates in six reportable segments: Multifamily, Industrial, Hotel, Retail and Other Properties, and Real Estate-Related Securities and Loans. Multifamily includes various forms of rental housing including apartments, student housing and manufactured housing. Other Properties include self-storage properties. As of September 30, 2019, the Company had received net proceeds of $9.8 billion from selling shares in its public offering.
Source: S&P Global Market Intelligence, Wikipedia, Las Vegas Review Journal, Blue Vault
