MGM Resorts International announced Tuesday it plans to sell the MGM Grand and Mandalay Bay properties on the Las Vegas Strip for $2.5 billion.
According to the Wall Street Journal, MGM Growth Properties LLC announced as part of its partnership with private-equity and real estate company Blackstone Group that it would purchase the two properties, with MGM Resorts continuing to operate them for an initial rent of $292 million.
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MGM Resorts plans to close the deal by the end of March, subject to certain closing conditions.
“These announcements represent a key milestone in executing the company’s previously communicated asset-light strategy, one that enables a best-in-class balance sheet and strong free cash flow generation to provide MGM Resorts with meaningful strategic flexibility to create continued value for our shareholders,” MGM Resorts CEO Jim Murren said in a statement.
The sale of the MGM Grand and Mandalay Bay come after MGM Resorts announced two blockbusters deals in October.
Not only did the company reach an agreement to sell Circus Circus Las Vegas for $825 million to an affiliate of Treasure Island owner Phil Ruffin, but it also sold the Bellagio for $4.25 billion to Blackstone Real Estate Income Trust.
Combined, the sales of the four properties are “expected to provide total net cash proceeds to MGM Resorts of $8.2 billion.”
“The valuation levels achieved on the Bellagio and MGM Grand Las Vegas transactions are a testament to MGM Resorts as a high-quality tenant and our overall asset quality,” MGM Resorts’ Paul Salem said. “The robust interest in our recent transactions further validates the company’s conviction on being able to unlock value for our shareholders through its asset light strategy.”
