MGM Resorts International announced Tuesday that it will be selling two of its most prominent properties—MGM Grand Las Vegas Hotel & Casino and Mandalay Bay Resort and Casino, Las Vegas—for $4.6 billion to a joint venture that includes real estate giant Blackstone Group Inc.

See alsoMGM Sells Bellagio to Trust; Will Continue to Operate

Blackstone will own slightly less than half (49.9 percent) of the properties through its nonlisted real estate investment trust while MGM Growth Properties LLC, a publicly traded real estate income trust (REIT), will own the remainder (50.1 percent). MGM Resorts separated from MGM Growth Properties in 2016 and still controls the REIT, which owns Mandalay Bay and other MGM real estate.

Together, MGM Grand and Mandalay Bay cover 226 acres of prime real estate on the Las Vegas Strip and offer 9,743 guest rooms, some 3 million sq. ft. of meeting space and approximately 300,000 sq. ft. of casino space. MGM Resorts will continue to manage the properties and pay an initial annual rent of $292 million to the ownership group.

“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 MGM CEO Jim Murren in a statement.

MGM Resorts has been selling its real estate assets due to pressure from investors to shift to a business model that emphasizes developing, managing and operating hospitality, gaming and entertainment properties. The company also aims to expand its sports operating operations and its global reach in locations such as Japan, which legalized casino gambling in 2018.

MGM still owns MGM Springfield in Massachusetts, 50 percent of CityCenter casino resort and retail complex in Las Vegas, and 55 percent of MGM Growth Properties.

The new transaction follows two MGM sales in October—Bellagio Las Vegas, to the same ownership group, for $4.25 billion, and Circus Circus Las Vegas, to Phil Ruffin, who owns Treasure Island Las Vegas, for $825 million.

Jon Gray, president of Blackstone, emphasized the importance of the most recent transaction to his company.

“This transaction reflects our continuing strong conviction in Las Vegas,” he said in a statement. “We are pleased to once again partner with MGM Resorts, a world-class operator, as well as MGM Growth properties.”

The sale is expected to close in the first quarter of this year, subject to customary closing conditions.

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