MGM Resorts International has announced that it has agreed to acquire the operations of The Cosmopolitan of Las Vegas from Blackstone for $1.625 billion in cash.

The deal is solely for the property’s operations, not the real estate itself. The purchase is part of a larger transaction in which Blackstone is selling the real estate of The Cosmopolitan to Stonepeak Partners, Cherng Family Trust, and Blackstone Real Estate Income Trust (BREIT). The total value of the sale, operations and real estate combined, is $5.65 billion. MGM will enter into a 30-year lease agreement with Stonepeak, Cherng, and BREIT, paying $200 million in rent for the first year. Rent will increase 2% per year for the first 15 years, then go up by the greater of 2% or the CPI increase. The deal includes three 10-year renewal options.

Blackstone bought The Cosmopolitan for $1.73 billion in 2014 and has since invested $500 million into the property.

“We are proud to add The Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio,” said MGM Resorts CEO & President Bill Hornbuckle in Monday’s announcement. “The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world’s premier gaming entertainment company. We look forward to welcoming The Cosmopolitan’s guests and employees to the MGM Resorts family.”

This agreement continues the trend toward gaming companies becoming “asset light,” meaning they have been shedding themselves of casino real estate while maintaining control of operations. MGM benefits by being able to focus on operations and everything that goes into running a casino resort property, while not having to deal with real estate maintenance, insurance, taxes, and the like. For Blackstone, it’s the opposite: it can focus on taking care of the property while guaranteeing itself an income stream for at least 30 years.

Each company plays to its strengths while teaming up to hopefully run a great casino resort. For customers, everything should looks basically the same.

Many of the casinos that MGM operates are owned by MGM Growth Properties, a REIT spun off from MGM Resorts International in 2016. MGM still owns nearly two-thirds of MGM Growth Properties.

The REIT completely owns or majority owns Park MGM, Mandalay Bay, The Mirage, New York-New York, Luxor, and Excalibur in Las Vegas. Among its other properties are the Borgata, MGM Grand Detroit, MGM National Harbor, and Beau Rivage.

In August of this year, VICI Properties, a REIT spun off from Caesars, agreed to acquire MGM Growth Properties for $17.2 billion, making VICI the largest land owner on the Las Vegas Strip.

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