MGM Resorts International announced Monday that it is selling the MGM Grand and Mandalay Bay resorts and casinos on the Las Vegas strip, to a joint venture between real estate company Blackstone Group and MGM Growth Properties, for about $2.5 billion.
MGM Growth Properties LLC will own 50.1% of the joint venture, with 49.9% to be owned by Blackstone. The deal will allow both properties to be leased by MGM Resorts for an initial annual rent of $292 million.
"These announcements represent a key milestone in executing the company's previously communicated asset-light strategy, one that enables a best-in-class balance sheet and strong free cash flow generation to provide MGM Resorts with meaningful strategic flexibility to create continued value for our shareholders," said Jim Murren, chairman and CEO of MGM Resorts.
The move comes on the heels of a couple of other notable real estate transactions, where MGM Resorts announced it was selling the Bellagio to a joint venture with Blackstone for about $4.25 billion, back in October; and MGM Resorts closed a deal just last month, selling its Circus Circus Las Vegas property for $825 million to an affiliate of Treasure Island owner Phil Ruffin.
"Our corporate objective remains crystal clear. We will continue to monetize our owned real estate assets, which facilitates our strong focus on returning capital to our shareholders, while also retaining significant flexibility to pursue our visible growth initiatives," said Murren.
The deal is expected to be completed within the first quarter of 2020.