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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

January 14 2020

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