MGM Grand & Bellagio Potential Sale
Two of the biggest and most well known Las Vegas casino/resorts are apparently on the market to be sold. According to Bloomberg, Blackstone Group Inc. is in “advanced talks” to purchase and then lease back MGM Grand Las Vegas and Bellagio from MGM Resorts International, their current owner.
Under a potential deal, Blackstone would own the two massive hotels, but MGM Resorts International would continue to manage the properties. The sale could potentially generate $7 billion in cash for MGM Resorts International which would allow them to potentially expand to Japan and elsewhere.
Between MGM Grand and Bellagio, Blackstone would be purchasing 10,000 rooms and over 300,000 square feet of casino space. They also own Cosmopolitan Las Vegas, another huge Strip property with over 3,000 hotel rooms and 110,000 square feet of casino space.
No Final Deal Reached
Neither Blackstone nor MGM Resorts International would comment to Bloomberg and apparently no final deal has been reached, but it is clear that MGM is looking to unload some properties in order to free up cash for expansion. Given that we don’t know the terms, it is impossible to say whether this is a good move or not, but the thought of two of the company’s most iconic properties being owned by someone else is a bit jarring.
The sale comes at an interesting time as well in my opinion. Blackstone clearly has a long history of successful investments, but I am surprised to see them pursuing the Vegas market so strongly given the economic uncertainty and Vegas’ reliance on tourism and corporate events. The city was hit hard during the last recession and those purchase prices aren’t exactly cheap.
No matter what happens with the potential sale of Bellagio and MGM Grand Las Vegas, I think one thing is definitely clear. Between the proposed Caesars Entertainment merger with Eldorado and developments like this one, the landscape of Vegas is changing once again. What that means for the long term remains to be seen, but it’s going to be a fun ride.
Oh and let’s hope they don’t turn the Bellagio fountains into a shopping mall.