In a deal similar to MGM Resorts’ sale the Bellagio casino last year, the MGM Grand and Mandalay Bay are being sold as part of a joint venture between MGM Growth Properties and Blackstone Real Estate.
The MGM Grand is the largest MGM property by square footage and one of it’s most iconic assets.
"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," MGM Resorts CEO and Chairman Jim Murren said in a news release.
The Wall Street Journal reported on the deal on Tuesday.
The recent sale of various MGM assets is part of the company’s move from a real estate-centric model and towards a company-wide focus on new business opportunities. These include sports betting, entertainment and international casino development.
Other similarly recent deals made by MGM includes the sale of the Bellagio, as well as the sale of its Las Vegas-strip casino Circus Circus.
In total, the Wall Street Journal reports the sale of these real estate assets to total $8.2 billion in cash proceeds for MGM. Additionally, more sales could be on the way.
According to the Wall Street Journal, MGM Resorts has a market value of around $17 billion. MGM began evaluating real estate asset deals to alleviate debt and the company expects to continue as part of its asset-light strategy.
It’s why MGM hasn’t moved to acquire any new casino properties and doesn’t plan on doing so anytime soon.
“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, including Japan and sports betting," Murren said.
The MGM Springfield in Massachusetts and stake in CityCenter in Las Vegas could be sold over the coming months, either outright or as part of joint venture projects.