Blackstone is set to sell its 49.9% interest in the two Las Vegas casino resorts, MGM Grand Las Vegas and Mandalay Bay, to VICI Properties, a real estate investment trust based in New York.
About the deal between VICI and Blackstone
Blackstone, the leading global investment firm, will sell its stake in the MGM Grand Las Vegas and the Mandalay Bay to Vici Properties Inc., a leading real estate investment trust, which owns the other 50.1% stake in the properties, the companies said recently.
Blackstone would receive $1.27 billion, and Vici would assume Blackstone Real Estate Investment Trust’s (BREIT) standing property-level debt that has a principal balance of $3 billion, according to the companies.
What prompted the sale?
Reacting to soaring interest rates and the turmoil that brews in the housing market, Blackstone has been quitting some real estate investments that have fixed returns. The company was also set to sell a $400 million stake in Indian REIT Embassy.
It was affirmed that the sale, which is expected to close early in the first quarter of 2023, will give Blackstone a profit of over $700M in less than three years, including rent from the operator.
The sale of these assets is an outstanding outcome for BREIT (Blackstone Real Estate Investment Trust) investors and, it will, in addition, enable the firm to further focus BREIT’s portfolio in its highest growth sectors, including logistics and rental housing.
Finalizing the deal
The sale is expected to be finalized early in the first quarter of 2023, and upon its completion, the transaction is expected by VICI Properties, to be immediately accretive to AFFO (Adjusted Funds From Operations) per share upon closing.
This deal features VICI’s numerous paths for growth despite the company’s larger base and a rising interest rate climate.
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