MGM buys CityCenter to sell Aria and Vdara in $3.9B leaseback deal with Blackstone

MGM Resorts International on Thursday announced it has agreed to buy the remaining half of CityCenter and sell the real estate for Aria Resort Casino and Vdara Hotel and Spa for nearly $3.9 billion in cash to private equity firm Blackstone. 

MGM is first buying out CityCenter partner Infinity World, which owns a 50% stake in CityCenter, for $2.1 billion. When that deal is complete, MGM Resorts will become the 100% owner of CityCenter on the Las Vegas Strip, which is comprised of Aria and Vdara. Then MGM will sell the properties to Blackstone, which will then allow MGM to lease back the hotels and continue operating them. Rent will cost MGM $215 million a year. The deals are expected to be complete in the third quarter of this year.

The agreement values the entire CityCenter complex at $5.8 billion, accounting for two acres of the property sold to developers earlier this year.

Following these moves, MGM will have more cash for expanding sports betting ventures and possible casino development in Japan, according to a Reuters report on Thursday. “We expect to continue executing on our asset-light strategy and utilizing the proceeds from our real estate transactions to … secure new growth opportunities,” MGM Resorts CEO Bill Hornbuckle told Reuters.

MGM has struck similar leaseback agreements with Blackstone in the past, including for Bellagio and MGM Grand.

Tyler Henritze, Head of U.S. Acquisitions Americas for Blackstone Real Estate, said: “This transaction reflects our high conviction in Las Vegas and our strong partnership with MGM Resorts. CityCenter is a best-in-class resort and complementary addition to our portfolio of high-quality assets on the Strip. We look forward to continuing our productive collaboration with MGM Resorts.”

The deal to buy out Infinity World’s stake in CityCenter will move forward even if there is a problem competing the Blackstone deal, according to an MGM statement.