Press Release

Press Release

MGM Growth Properties And Blackstone Real Estate Income Trust To Form Joint Venture To Acquire The Las Vegas Real Estate Of The MGM Grand And Mandalay Bay For $4.6 Billion And Simultaneously Execute Long-Term Lease With MGM Resorts

LAS VEGAS & NEW YORK, January 14, 2020– MGM Growth Properties LLC (“MGP”) (NYSE: MGP) and Blackstone Real Estate Income Trust, Inc. (“BREIT”) today announced that MGP and BREIT have entered into a definitive agreement to form a new joint venture to acquire the Las Vegas real estate assets of the MGM Grand and Mandalay Bay for $4.6 billion.  In addition, BREIT will purchase $150 million in MGP Class A shares. MGP will own 50.1% of the joint venture, and BREIT will own 49.9%. 

At closing, MGM Resorts International (“MGM Resorts”) (NYSE: MGM) will enter into a long-term triple net master lease for both properties and provide a full corporate guarantee of rent payments. MGM Resorts will continue to manage, operate and be responsible for all aspects of the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments. 

“We are pleased to announce this partnership with BREIT, which illustrates the numerous opportunities available to grow our business and emphasizes the strong institutional demand for gaming real estate assets,” said James Stewart, CEO of MGP. “Along with the contemplated cash redemption of $1.4 billion of MGM’s operating partnership units as announced by MGM, we expect this transaction to be accretive to AFFO while allowing us to maintain pro rata net leverage of 5.6x.”

Jon Gray, Blackstone President & COO, said, “This transaction reflects our continuing strong conviction in Las Vegas. We are pleased to once again partner with MGM Resorts, a world-class operator, as well as MGM Growth Properties.”

Tyler Henritze, Head of U.S. Acquisitions for Blackstone Real Estate, said, “Similar to the Bellagio, owning these two premier Las Vegas assets under a long-term lease with MGM provides stable cash flow and excellent downside protection for our BREIT investors. We look forward to growing our partnership with MGM Resorts and MGM Growth Properties, a best-in-class company.”

Together, the MGM Grand and Mandalay Bay comprise 9,743 rooms, approximately three million square feet of meeting space and approximately 300,000 square feet of casino space across 226 acres on the Las Vegas Strip. MGM Resorts’ initial annual rent will be $292 million. MGP currently owns the Mandalay Bay real estate, and MGM Resorts currently owns the MGM Grand real estate.

MGP is a REIT focused on the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts. Blackstone Real Estate has a deep history and expertise in the Las Vegas real estate market across office, hospitality and residential asset classes, including BREIT’s recent acquisition of the Bellagio for $4.25 billion. 

This transaction is expected to close in the first quarter of 2020, subject to certain customary closing conditions.

Advisors
Morgan Stanley & Co. LLC and Evercore served as financial advisors to MGM Growth Properties, and Hogan Lovells US LLP served as legal counsel. Rockefeller Capital Management acted as financial advisor to the conflicts committee of the MGP Board of Directors, and Potter Anderson & Corroon LLP served as legal counsel. Citigroup Global Markets Inc. served as financial advisor to BREIT. Citigroup Global Markets Inc., Barclays Capital Real Estate Inc., Deutsche Bank AG, and Societe General served as BREIT’s financing advisors. Simpson Thacher & Bartlett LLP served as legal counsel to BREIT.

About MGM Growth Properties LLC 
MGM Growth Properties LLC (NYSE: MGP) is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment and retail offerings. MGP currently owns a portfolio of properties, consisting of 11 premier destination resorts in Las Vegas and elsewhere across the United States, MGM Northfield Park in Northfield, OH, Empire Resort Casino in Yonkers, NY, as well as a retail and entertainment district, The Park in Las Vegas.  As of December 31, 2018, our destination resorts, the Park, and MGM Northfield Park collectively comprise approximately 27,400 hotel rooms, 2.7 million convention square footage, 150 retail outlets, 300 food and beverage outlets and 20 entertainment venues. As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality and leisure industries. For more information about MGP, visit the Company’s website at http://www.mgmgrowthproperties.com.  In addition, MGP has posted an investor presentation on its website related to the transaction, which is available at: https://www.mgmgrowthproperties.com/events-and-presentations/default.aspx.

About Blackstone Real Estate Income Trust
Blackstone Real Estate Income Trust, Inc. (“BREIT”) is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors.  BREIT invests in stabilized, income-generating U.S. commercial real estate across the key property types and to a lesser extent in real estate-related securities. BREIT is externally managed by a subsidiary of Blackstone (NYSE: BX), a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $157 billion in investor capital under management. Further information is available at www.breit.com.

Forward-Looking Statements
This press release includes “forward-looking” statements and “safe harbor statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and/or uncertainties, including those described in MGP’s and BREIT’s public filings with the Securities and Exchange Commission. MGP and BREIT have based forward-looking statements on current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, expectations regarding the closing of the transaction, any benefits expected to be achieved as a result of the transactions and statements regarding future performance, including MGP’s expected accretion and pro forma leverage following completion of the transactions. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include risks related to the receipt of, or delays in obtaining, any regulatory approvals required to own the properties, or other delays or impediments to completing the planned joint venture and entering into the lease and other factors described in MGP’s periodic reports filed with the Securities and Exchange Commission as well as those described under the section entitled “Risk Factors” in BREIT’s prospectus and its annual report for the most recent fiscal year and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. In providing forward-looking statements, neither MGP nor BREIT is undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If MGP or BREIT updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.

Contacts

Blackstone
Jennifer Friedman
Jennifer.Friedman@blackstone.com
(212) 583-5122

MGM Growth Properties
Investment Community
Andy H. Chien, Chief Financial Officer 
(702) 669-1470 

Media 
(702) 669-1480 or media@mgpreit.com

Past performance does not guarantee future results. Financial information is approximate and as of March 31, 2022, unless otherwise noted. The words “we”, “us”, and “our” refer to BREIT, together with its consolidated subsidiaries, including BREIT Operating Partnership L.P., unless the context requires otherwise.


Summary of Risk Factors

BREIT is a non-listed REIT that invests primarily in stabilized income-generating commercial real estate investments across asset classes in the United States and, to a lesser extent, real estate debt investments, with a focus on current income. We invest to a lesser extent in countries outside of the U.S. This investment involves a high degree of risk. You should purchase these securities only if you can afford the complete loss of your investment. You should read the prospectus carefully for a description of the risks associated with an investment in BREIT. These risks include, but are not limited to, the following:

  • There is no public trading market for our common stock and repurchase of shares by us will likely be the only way to dispose of your shares. We are not obligated to repurchase any shares under our share repurchase plan and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may make exceptions to, modify or suspend our share repurchase plan. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid.
  • Distributions are not guaranteed and may be funded from sources other than cash flow from operations, including borrowings, offering proceeds, the sale of our assets and repayments of our real estate debt investments. We have no limits on the amounts we may fund from such sources.
  • The purchase and repurchase price for shares of our common stock are generally based on our prior month’s net asset value (“NAV”) and are not based on any public trading market. While there will be independent annual appraisals of our properties, the appraisal of properties is inherently subjective, and our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day. The NAV per share, if calculated as of the date on which you make your subscription request or repurchase request, may be significantly different than the transaction price you pay or the repurchase price you receive. Certain of our investments or liabilities are subject to high levels of volatility from time to time and could change in value significantly between the end of the prior month as of which our NAV is determined and the date that you acquire or repurchase our shares, however the prior month’s NAV per share will generally continue to be used as the offering price per share and repurchase price per share.
  • We are dependent on BX REIT Advisors L.L.C. (the “Adviser”) to conduct our operations. The Adviser will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and Other Blackstone Accounts (as defined in BREIT’s prospectus), the allocation of time of its investment professionals and the substantial fees that we will pay to the Adviser.
  • On acquiring shares, you will experience immediate dilution in the net tangible book value of your investment.
  • There are limits on the ownership and transferability of our shares.
  • If we fail to qualify as a REIT and no relief provisions apply, our NAV and cash available for distribution to our stockholders could materially decrease.
  • We do not own the Blackstone name, but we are permitted to use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Blackstone Inc. (together with its affiliates, “Blackstone”). Use of the name by other parties or the termination of our trademark license agreement may harm our business.

Certain countries have been susceptible to epidemics which may be designated as pandemics by world health authorities, most recently COVID-19. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, has had and may in the future have a negative impact on the economy and business activity globally (including in the countries in which BREIT invests), and thereby may adversely affect the performance of BREIT’s investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, presents material uncertainty and risk with respect to BREIT and the performance of its investments. For further information on the impact of COVID-19 on BREIT, please refer to “Risk Factors—The current outbreak of the novel coronavirus, or COVID-19, has caused severe disruptions in the U.S. and global economy and has had an adverse impact on our performance and results of operations” in BREIT’s prospectus.

On February 24, 2022, Russian troops began a full-scale invasion of Ukraine and, as of the date of this material, the countries remain in active armed conflict. Around the same time, the United States, the United Kingdom, the European Union, and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russia-backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which BREIT invests), and therefore could adversely affect the performance of BREIT’s investments. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, could present material uncertainty and risk with respect to BREIT and the performance of its investments and operations, and the ability of BREIT to achieve its investment objectives. Similar risks will exist to the extent that any investments, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas.

Certain information contained in this material has been obtained from sources outside Blackstone, which in certain cases has not been updated through the date hereof. While such information is believed to be reliable for purposes used herein, no representations are made as to the accuracy or completeness thereof and none of Blackstone, its funds, nor any of their affiliates takes any responsibility for, and has not independently verified, any such information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates.

Opinions expressed reflect the current opinions of BREIT as of the date appearing in the materials only and are based on BREIT’s opinions of the current market environment, which is subject to change. Stockholders, financial professionals and prospective investors should not rely solely upon the information presented when making an investment decision and should review the most recent prospectus, as supplemented, available at www.breit.com. Certain information contained in the materials discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.

All rights to the trademarks and/or logos presented herein belong to their respective owners and Blackstone’s use hereof does not imply an affiliation with, or endorsement by, the owners of these logos.

Clarity of text on this website may be affected by the size of the screen on which it is displayed.

Forward-Looking Statements

Certain information contained in this communication constitutes “forward-looking statements” within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward looking terminology, such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “identified,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “confident,” “conviction,” or the negative versions of these words or other comparable words thereof. These may include financial estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements with respect to acquisitions, statements regarding future performance and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. BREIT believes these factors also include, but are not limited to, those described under the section entitled “Risk Factors” in BREIT’s prospectus and annual report for the most recent fiscal year, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or BREIT’s prospectus and other filings). Except as otherwise required by federal securities laws, BREIT undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

Blackstone Securities Partners L.P. (“BSP”) is a broker-dealer whose purpose is to distribute Blackstone managed or affiliated products. BSP provides services to its Blackstone affiliates, not to investors in its funds, strategies or other products. BSP does not make any recommendation regarding, and will not monitor, any investment. As such, when BSP presents an investment strategy or product to an investor, BSP does not collect the information necessary to determine—and BSP does not engage in a determination regarding—whether an investment in the strategy or product is in the best interests of, or is suitable for, the investor. You should exercise your own judgment and/or consult with a professional advisor to determine whether it is advisable for you to invest in any Blackstone strategy or product. Please note that BSP may not provide the kinds of financial services that you might expect from another financial intermediary, such as overseeing any brokerage or similar account. For financial advice relating to an investment in any Blackstone strategy or product, contact your own professional advisor.

This website must be read in conjunction with BREIT’s prospectus in order to fully understand all the implications and risks of an investment in BREIT. Please refer to the prospectus for more information regarding state suitability standards and consult a financial professional for share class availability and appropriateness.

THIS IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED IN THE PROSPECTUS FOR THE OFFERING, AS AMENDED AND SUPPLEMENT (THE “PROSPECTUS”). THE OFFERING IS MADE ONLY BY THE PROSPECTUS AND THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER STATE SECURITIES REGULATOR HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THE PROSPECTUS IS TRUTHFUL OR COMPLETE. IN ADDITION, THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THE OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.