In a move that might spur major expansion of MGM Hotels & Resorts and makes a real estate investment trust (REIT) one of the high rollers of Las Vegas, Vici Properties will acquire MGM Growth Properties (MGP) for $17.2 billion.
When the agreement is complete, Vici, a REIT, will have a value of $45 billion and will have subsumed the 15 mostly Las Vegas-based resorts owned by MGP, including Park MGM Las Vegas; New York New York Las Vegas Hotel & Casino; and Borgata Hotel, Casino & Spa in Atlantic City. Vici will retain MGP’s existing 50.1 percent stake in its joint venture with Blackstone Real Estate Income Trust, Inc., which owns the real estate of MGM Grand Las Vegas and Mandalay Bay in Las Vegas.
This news is just the latest major roll of the dice for Vici. The venture has a pending $4 billion acquisition of the real estate of The Venetian Resorts and Sands Expo Center in Las Vegas in the wake of Las Vegas Sands Corporation’s decision to leave The Strip, announced earlier this year.
According to MGM President and CEO Bill Hornbuckle, this acquisition will allow the company to focus on expansion. “This transaction unlocks the significant real estate value of our assets, enhances our financial flexibility and strengthens our ability to execute key growth initiatives,” he said in a press release.
This comes shortly after Eldorado Resorts’ $17.3 billion acquisition of Caesars Entertainment in 2020 that increased its portfolio to 55 casino properties globally, including eight on The Strip.
Vici CEO Ed Pitoniak said on a conference call that the deal creates the largest private owner of meeting and convention space in the country and the largest hotel owner in the United States as measured by rooms. The Strip might be “the most economically productive single street in America,” he continued.
Vici’s portfolio consists of 28 casino properties and four golf courses, including many operated by Caesars Entertainment, Penn National Gaming and Hard Rock International. The transaction is expected to close the first half of 2022.