Las Vegas Strip's biggest property owner in deal to take full ownership of two casinos

The largest spot proprietor connected the Las Vegas Strip is doubling down and taking afloat ownership of the MGM Grand Las Vegas and Mandalay Bay, which the woody values astatine $5.5 billion.

VICI Properties, a existent property concern spot based successful New York, has agreed to bargain Blackstone's 49.9% involvement successful the 2 Las Vegas casino resorts. VICI presently owns a 50.1% involvement successful the property, which it acquired erstwhile it bought MGM Growth properties successful May.

The transaction is expected to adjacent successful aboriginal 2023.

Appearing connected CNBC's Power Lunch, VICI Properties CEO Ed Pitoniak said Blackstone approached him conscionable a mates weeks ago, and that the woody came unneurotic quickly.

"We were precise excited astir the opportunity. Obviously it simplifies our structure, but it gives america full ownership of 2 of the astir iconic assets connected the Las Vegas portion the MGM Grand and Mandalay Bay," Pitoniak said.

Blackstone Real Estate Investment Trust, known arsenic BREIT, said Thursday that it decided to bounds withdrawals aft it saw redemptions successful October that transcend their monthly limits. Blackstone shares dropped astir 10% connected the news.

But what was a occupation for Blackstone whitethorn beryllium a portion of bully luck for VICI.

"We similar the woody arsenic it simplifies VICI's operation and highlights VICI's aggregate paths for maturation contempt the company's larger basal and a rising involvement complaint environment," Truist expert Barry Jonas wrote successful a lawsuit note.

Gaming REITS specified arsenic VICI ain the buildings and the onshore of casinos and resorts. Gambling companies, specified arsenic Caesars and MGM Resorts − some tenants of VICI − ain the operations.

MGM Grand Las Vegas and Mandalay Bay, located connected the southbound extremity of the Strip, see much than 11,000 edifice rooms, 321,000 quadrate feet of gaming floor, and 3 cardinal quadrate feet of gathering facilities.

VICI is putting successful much than a $1 cardinal successful cash, and assuming much than $3 cardinal of Blackstone indebtedness astatine a 3.56% complaint done 2032. Pitoniak called that a bully woody astatine a clip erstwhile VICI mightiness person expected to wage 6%.

VICI's CEO says he's bullish connected Las Vegas's continued growth, pointing to a packed normal and amusement calendar adjacent year, and attention-getting sports events including F1 successful November 2023.

Despite the sale, Blackstone COO Jay Gray said Las Vegas continues to beryllium a precocious condemnation marketplace for Blackstone, which besides owns the carnal spot of the Cosmopolitan and Bellagio.

Many analysts and investors are besides bullish connected the opportunities for maturation successful Las Vegas.

October marked the 20th consecutive period of $1 cardinal oregon much successful authorities gaming revenue, according to figures released by the Nevada Gaming Control Board.

Strip casinos are seeing a 20% surge successful gross done October to $6.8 cardinal successful gaming gross from a twelvemonth ago.

Las Vegas is besides attracting a grounds fig of visitors. Harry Reid International saw much than 5 cardinal passengers for the archetypal clip ever in October.

"It's further grounds that Las Vegas remains amongst the astir in-demand destinations successful the world," said Rosemary Vassiliadis, Clark County's manager of aviation.

And edifice gross successful Las Vegas was up 51% successful October compared with October 2019, earlier the pandemic, according to the Las Vegas Convention and Visitors Authority.

Deutsche Bank, which has a "buy" standing connected the stock, raised its terms people to $38 pursuing quality of the transaction.