LAS VEGAS – A New York-based real estate investment firm will emerge as the largest landholder on the Las Vegas Strip under a $17.2 billion property deal between landholding affiliates of casino giants Caesars Entertainment and MGM Resorts International.
Combined, VICI Properties Inc. will end up with properties in 15 states.
MGM Resorts property names will stay the same and gamblers, diners, shoppers and show-goers shouldn’t notice any difference, company spokesman Brian Ahern said Thursday.
“Nothing is changing in terms of operations or branding,” he said.
VICI Properties is a real estate investment trust that owns properties and leases them back to hospitality and entertainment operators. It announced with MGM Resorts on Wednesday that it will buy out MGM Growth Properties, a publicly traded landowner of holdings in eight states.
The transaction includes about $5.7 billion in debt and is expected to close by next summer, subject to regulatory and stockholder approvals. The buyout easily ranks among the biggest real estate deals ever on the Las Vegas Strip.
“This is large-scale and high-quality real estate,” Ed Pitoniak, VICI Properties CEO, said on a conference call, the Las Vegas Review-Journal reported.
Bill Hornbuckle, president and CEO of MGM Resorts, said in a statement the transaction “unlocks the significant real estate value of our assets, enhances our financial flexibility and strengthens our ability to execute key growth initiatives.”
VICI owns Harrah’s Las Vegas and Caesars Palace, which are leased to Caesars Entertainment, and nearby undeveloped land east of the Strip.
The seven MGM Resorts properties on the Strip being acquired by VICI are The Mirage, New York-New York, MGM Grand Las Vegas, Mandalay Bay, Excalibur, Luxor, Park MGM and The Park Las Vegas promenade, which includes land under T-Mobile Arena.
“For the average consumer, they’re not worried about who the landlord is,” Brendan Bussmann of Las Vegas-based Global Market Advisors, told the Review-Journal. “MGM is going to continue to operate those properties as if they were theirs.”
MGM Growth has properties with about 33,000 hotel rooms. VICI already owns properties with some 17,800 hotel rooms, including Harrah’s and Caesars brands.
The merger will give it properties in Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Pennsylvania and West Virginia.
“Upon completion of the merger, VICI will have an estimated enterprise value of $45 billion, firmly solidifying VICI’s position as the largest experiential net lease REIT while also advancing VICI’s strategic goals of portfolio enhancement and diversification,” the company said in a statement.
In March, VICI and investment firm Apollo Global Management announced a $6.25 billion deal to purchase Las Vegas Sands Corp. properties — The Venetian, Palazzo and the Sands Expo and Convention Center — in Las Vegas. VICI will acquire the real estate, and Apollo will manage the properties. That deal is expected to close early next year.