MGM Resorts to sell the Bellagio and Hotel Circus Circus Las Vegas for $5bnTagged with: Bellagio | Blackstone Real Estate Income Trust | Circus Circus Las Vegas | Jim Murren | Las Vegas | Nevada | Paradise | Phil Ruffin | Treasure Island | USA
MGM Resorts International has signed two deals with a combined worth of around $5 billion to monetize Hotel Circus Circus Las Vegas, and the Bellagio – a resort, luxury hotel and casino in Paradise, Nevada.
The global entertainment company has agreed to sell Circus Circus Las Vegas to an affiliate of Treasure Island owner Phil Ruffin for $825 million.
MGM Resorts acquired Circus Circus Las Vegas in 2005 as part of its acquisition of Mandalay Resort Group. Opened originally in 1968, Circus Circus Las Vegas currently has 2,300 employees. The hotel cum casino features Adventuredome, a five-acre indoor amusement park, 37-acre festival grounds, and a 10-acre RV park.
Phil Ruffin said: “Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio. I have tremendous respect for Jim Murren and the MGM team, and my relationship with them goes back to my friendship with Kirk Kerkorian and continues to this day.”
In the other transaction, MGM Resorts is joining forces with Blackstone Real Estate Income Trust (BREIT) to create a joint venture to buy the real estate assets of the Bellagio for $4.25 billion in a sale-leaseback deal.
The joint venture will be owned 95% by BREIT with the remaining 5% to be held by MGM Resorts.
Under the terms of the deal, the entertainment company will lease the casino hotel from the joint venture. MGM Resorts will continue to manage, operate, and be responsible for all aspects of the asset on an everyday basis.
It will also sign a long-term lease and will be responsible for all operations and capital expenditures of the Bellagio. The property will be owned by the joint venture which will receive rent payments.
Jim Murren – CEO of MGM Resorts said: “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. We look forward to partnering with Blackstone on this asset and believe that this transaction will create significant value for our shareholders.”