This will see the former acquire common and preferred equity interests from BREIT in a new joint venture that owns a 95 per cent interest in the real estate assets of the gaming facility.

According to the pair, Realty Income will invest $300m of common equity in the joint venture, subject to certain adjustments, to acquire a 21.9 per cent indirect interest in the property. Blackstone will retain 73.1 per cent, while MGM will keep hold of its five per cent share.

Furthermore, the group will also spend $650m to acquire a yield-bearing preferred equity interest in the joint venture. The transaction is expected to close in the fourth quarter of 2023, subject to customary closing conditions.

“Where you invest matters and this transaction demonstrates the strong investor demand for the high-quality assets we have assembled within BREIT,” stated Nadeem Meghji, Head of Blackstone Real Estate Americas.

“The Bellagio is an iconic property in the heart of the Las Vegas Strip and we look forward to our continued ownership of this asset, now in partnership with Realty Income. This partial sale represents another terrific outcome for BREIT shareholders.” 

Blackstone completed the $4.25bn acquisition of the real estate assets of the Bellagio from MGM in November 2019, however, it was revealed earlier in the year that the group was thinking of offloading a stake in the group.

In addition, last year Wynn Resorts confirmed the sale of the land and real estate assets of Encore Boston Harbor to Realty Income Corporation for $1.7bn.

“Realty Income seeks to invest in high-quality real estate at scale in partnership with operators who are leaders in their respective industries,” commented Sumit Roy, Realty Income’s President and Chief Executive Officer. 

“This transaction to acquire an interest in the Bellagio, an iconic property, represents our second investment in the gaming industry and exemplifies the advantages of our size, scale and access to capital. 

“We are pleased to initiate our credit investment platform through a preferred equity investment in the Bellagio joint venture. 

“Credit investments are a natural adjacency to our traditional business, allowing us to provide additional value to our clients while leveraging our core competencies in transaction sourcing and structuring, and real estate and credit underwriting and monitoring.”

The Bellagio features approximately 4,000 guestrooms and suites across two towers, 157,000 square feet of gaming space and 200,000 gross square feet of meeting and event facilities.

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According to Bloomberg News, which could not name sources due to the private nature of the deliberations, Blackstone is considering its options but is, at the current time, not 100 per cent committed to the potential sale.

The New York headquartered firm announced $4.25bn acquisition of the real estate assets of the Bellagio from MGM Resorts International in November 2019, as the latter made further headway into an asset light strategy.

This also saw an affiliate of Treasure Island owner Phil Ruffin enter into a definitive agreement to acquire Circus Circus Las Vegas for $825m.

As part of the transaction, MGM signed a long-term lease, with an initial annual rent of $245m, and continued to be responsible for all operations and capital expenditures of the venue.

This becomes the latest offload of gaming properties undertaken by Blackstone, with Vici Properties finalising the purchase of the remaining 49.9 per cent of a joint venture that owns MGM Grand Las Vegas and Mandalay Bay Resort earlier in the year.

The pair noted that the acquisition of Blackstone’s share of the JV will be for $1.27bn and Vici’s assumption of the pro-rata share of the existing property-level debt. 

This had a principal balance of $3bn, matures in 2032, and bears interest at a fixed rate of 3.558 per cent per annum through March 2030.

Earlier this week, Blackstone cashed out on yet more real estate after Prologis detailed an intention to acquire almost 14 million square feet of industrial properties for $3.1bn.

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The company has also unveiled the Bellagio Fountain Club for the upcoming Formula One Las Vegas Grand Prix taking place on the Vegas Strip in November this year.

MGM Resorts renews GameSense contract

MGM’s deal with the BCLC began in 2017 and provided MGM and BetMGM customers with tools to help with positive, transparent and supportive conversations regarding responsible gambling.

Further details regarding the deal extension will be announced at the BCLC’s New Horizons in Responsible Gambling Conference on 6-9 March.

“Through our partnership and collaboration with BCLC, we’re proud to set the standard and do our part to ensure that gaming is an enjoyable experience,” commented Bill Hornbuckle, CEO & President, MGM Resorts International.

“As the industry expands, we will continue to provide players tools and capabilities that empower everyone to play responsibly.” 

Pat Davis, BCLC President & CEO, added: “We’re proud to continue providing MGM Resorts with the tools to offer the GameSense experience at its properties and online at BetMGM. When we work together to develop best practices and share learnings that support positive play, we can reduce harm and make gambling safer throughout the industry.”

BetMGM fully integrated GameSense into its platforms last year, helping over 100,000 customers each month via website visits and direct email correspondence. Responsible gambling messaging is displayed across the operator’s app, advertisements, and digital and social platforms.

GameSense supplies players with responsible gambling information, explains how gambling works and offers resources for customers and their respective families to access problem gambling assistance and support. Every new customer also receives a welcome kit.

The same support is also available at MGM properties, where GameSense signage is displayed prominently, with responsible gaming messaging delivered on over 35,000 TV screens, more than 22,000 slot machines showing GameSense reminders and 8,500 machines featuring QR codes linking to responsible gambling information.

MGM and BetMGM also provide all its employees with responsible gaming training throughout the year to help customers navigate GameSense.

“Since integrating GameSense into BetMGM, we’ve noticed significant and positive results,” noted Adam Greenblatt, CEO of BetMGM.

“With the continued expansion of sports betting and igaming, our commitment to responsible gaming practices has never been more important. This contract extension comes at a crucial time and allows us to deliver an impactful program to our players for years to come.”

Bellagio Fountain Club ready for Formula One

MGM’s Bellagio Fountain Club has also begun selling tickets for the F1 Las Vegas Grand Prix on November 16-18.

Alongside the views of the circuit, tickets include meet and greets with F1 ambassadors, unlimited food and beverage by celebrated chefs, cocktails and wines from master mixologists and sommeliers, access to the club’s private indoor and rooftop hospitality decks, access to F1 simulators, and transportation to the paddock for select access to paddock and pit lane tours.

Chefs on rotation throughout the three days include Mario Carbone, David Chang, Michael Mina, Masaharu Morimoto, Bryan & Michael Voltaggio and Jean-Georges Vongerichten, with new menus introduced daily.

Packages include three-day event tickets and accommodation within MGM Resorts rooms and suites within walking distance from the circuit, and seats from an elevated, centralised location on Bellagio’s signature lake.

“The Bellagio Fountain Club will marry the epic F1 experience with MGM Resorts’ unbelievable talents and iconic destinations, ultimately creating an exclusive and legendary race day experience right atop the resort’s Fountains,” stated Steve Zanella, CCO of MGM Resorts. 

“This is just the beginning for F1 fans coming to Vegas. No one throws a party like our city, and we’re primed to make the Formula 1 Las Vegas Grand Prix the world’s most sought-after race experience. We will have more news to share for 2023 and are incredibly excited to build upon this year’s race for years to come.”

Although Bellagio Grandstands packages are sold out, packages with East Harmon Zone Grandstand seats are available, which are located near the paddock, offering views of the start and finish line and behind-the-scenes sights of the pit lane and team garages.

“Demand for the Bellagio Grandstands was spectacular and those packages sold out quickly,” added Zanella.

“Guests still have the opportunity to enjoy the race from the exclusive Bellagio Fountain Club, which we believe provides one of the best viewing settings in all of sports, coupled with an overall experience to match.”

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The joint Blackstone and MGM venture follows investment bank Union Gaming stressing that Las Vegas could well be set for a flurry of activity following the recent sale of the Rio All-Suite Hotel and Casino by Caesars Entertainment.

As part of the latest transaction, MGM is to lease the property from the joint venture and continue to manage, operate and be responsible for all aspects on a day-to-day basis. 

Furthermore, MGM Resorts will sign a long-term lease and continue to be responsible for all operations and capital expenditures of the Bellagio, with the joint venture owning the property and receiving annual rent payments of $245m.

“As big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio on behalf of our BREIT investors. We look forward to a long and productive partnership with this world-class company,” commented Jon Gray, Blackstone President and COO.

Subject to customary closing conditions, the sale is expected to be finalised during the fourth quarter of this year and forms part of MGM’s ongoing asset light strategy following an extensive strategic review.

Designed to accelerate top line growth, enhance return on investment and result in a more financially robust, global enterprise, the move comes as MGM strives to evolve from a primarily brick and mortar real estate business towards a developer, manager and operator of leading gaming, hospitality and entertainment properties.

“This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio as a premier asset in gaming and solidifies our status as a premier operator of gaming and entertainment properties,” explained Jim Murren, chairman and CEO of MGM Resorts International.

“We will use the proceeds from this transaction, together with the proceeds from the pending sale of Circus Circus Las Vegas, to build a fortress balance sheet and return capital to shareholders.  

“By the end of 2020 we intend to have domestic net financial leverage at our operating properties of approximately 1x.

“These transactions enhance the company’s strategic and operational flexibility and reinforce its commitment to targeted new growth opportunities, including securing and investing in one of the integrated resort licenses in Japan and becoming an industry leader in sports betting in the US. We remain committed to delivering on our 2020 goals and continue to be on track to achieve our previously announced targets.”

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Following the confirmation, the real estate investment trust has subsequently entered into a joint venture alongside MGM that sees each represented 95 per cent to five per cent respectively.

As part of the transaction which was first announced last month, MGM has leased the property from the joint venture and continues to manage, operate and be responsible for all aspects of the property on a day-to-day basis. 

The company is to sign a long-term lease and continue to be responsible for all operations and capital expenditures of the Bellagio, with the joint venture owning the property and receiving annual rent payments of $245m.

This deal marks a continuation of MGM’s asset light strategy, coming at the same time as an affiliate of Treasure Island owner Phil Ruffin entering a definitive agreement to acquire Circus Circus Las Vegas for $825m.

The purchase price will comprise $662.5m paid in cash and a $162.5m note due in 2024, which the transaction is expected to close in the fourth quarter of 2019 subject to customary closing conditions, including receipt of necessary regulatory approvals. 

Speaking on a conference call regarding the Las Vegas-headquartered organisations latest financial results, Jim Murren, chairman and CEO of MGM Resorts, said of the strategy: “We recently announced two significant transactions, which form part of our broader asset-light strategy and the shift in our business model away from a capital-intensive real estate business towards a developer, manager and operator of leading gaming, hospitality and entertainment properties.” 

It was said that its flagship MGM Grand could be the next Las Vegas Strip casino to be offloaded, with the flurry of activity following news of the sale of the Rio All-Suite Hotel and Casino by Caesars Entertainment in September.

Proceedings from any potential sale would be used to reduce debt as well as reinvest in further opportunities worldwide, including Japan’s impending integrated resort scene.

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Transitioning venues in its home city within the state of Nevada to MGM management, the previous deal between the two relating to Stack at The Mirage, Fix, Yellowtail, and Lily Lounge at Bellagio, as well as Alibi Ultra Lounge and Herringbone at Aria, will end effective May 31, 2019.

Ari Kastrati, senior vice president of food and beverage strategy at MGM, commented: “Hakkasan Group is an outstanding partner and we look forward to our continued collaboration with them. Moving forward, as we bring the management of Stack, Fix, Yellowtail, Lily, Alibi and Herringbone, including all employees, under the MGM Resorts umbrella, we will be focused on a seamless transition and continuing to deliver unparalleled experiences for our guests.”

Hakkasan Group will continue to manage the Jewel Nightclub and Liquid Pool Lounge at Aria, 1OAK Nightclub at The Mirage, Wet Republic Ultra Pool, Level Up at MGM Grand as well as the Hakkasan Group-owned venue Hakkasan Nightclub and Restaurant.

It is said that as a result of the strategic transaction, the group is to be to develop further dining and lounge concepts for the future, unrestricted by exclusivity within Las Vegas.

“Hakkasan Group’s continued focus is on strategic global expansion in key destinations around the world, and we look forward to bringing new hospitality concepts to market,” added Michael Ryan-Southern, chief financial officer of Hakkasan Group.

“We’d like to thank MGM Resorts International for the successful partnership and look forward to our continued path together.”

Las month MGM revealed it had surpassed first quarter financial expectations, as the company re-emphasised its global targets moving forward, including a number of property enhancement, implementation of its 2020 initiative and growth opportunities within the prospective integrated resorts scene in Japan.

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CC Gaming has been listed as a signatory for the definitive purchase agreement, which will provide Maverick with an additional 435 slots, 11 table games and 544 hotel rooms.

The one-year-old gaming company was established in a joint venture between Eric Persson, who had worked at Las Vegas Sands, Justin Beltram from Bellagio and Marin Bay Sands. Since its development, Maverick has since acquired the Wendover Nugget and Red Garter hotels in Nevada.

Maverick’s manager, Persson, recently brokered a merger agreement between the company and Nevada Gold & Casinos. Maverick acquired all of the outstanding shares of the Nevada Gold’s common stock for $2.50 per share, paid via cash consideration, and was subject to certain minor adjustments.

The sale was entirely funded with debt financing from Nevada State Bank plus equity financing from Maverick.

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The latest luxury hotel chain to hit the Las Vegas strip, Hilton is to see the 389-room casino less property be promptly re-branded as Waldorf Astoria Las Vegas.

Jim Murren, chairman and chief executive officer of MGM Resorts International, commented: “CityCenter has continued to deliver strong operating results and has cemented itself as a premier luxury destination in Las Vegas.

“As a result of its financial strength and the closing of this transaction, CityCenter expects to return approximately $200 million to its owners, MGM Resorts and Infinity World during the third quarter.”

“We thank the employees of the Mandarin Oriental Las Vegas and welcome the Waldorf Astoria team to the CityCenter campus,” added Bill Grounds, president and COO of Infinity World Development Corp. “We wish them all the best in the future.”

Confirming the deal, Hilton has praised its new entity’s close proximity to a plethora of major Las Vegas attractions, with the mixed-use development located between the Bellagio and Park MGM resorts.

Amongst the entertainment offerings near-by the Waldorf Astoria Las Vegas are the famed Bellagio fountains, 20,000 seater T-Mobile Arena and the 4,004 room ARIA Resort and Casino.

Quoted in the Las Vegas Review-Journal, Dino Michael, global brand head of Waldorf Astoria Hotels and Resorts, stated: “We’ve been looking to enter the Vegas market for some time, it just felt somewhere we needed to be.

“First and foremost, what we want when you arrive into our hotels is to have a real sense of place.

“I think if you arrive to our hotel and you don’t get a sense of geography or location, I think we’ve probably failed to meet the luxury guest expectation.”

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