US real estate investment trust VICI Properties is buying the remaining 49.9% stake it doesn’t already own in a Las Vegas leisure properties partnership from Blackstone Real Estate Income Trust (BREIT).

NYSE-listed VICI, which currently owns a 50.1% interest in the joint venture that owns MGM Grand Las Vegas and Mandalay Bay Resort, is paying $1.27bn (€1.22bn) to acquire BREIT’s interest in the partnership, the companies said. VICI will also assume BREIT’s share of an existing $3bn property-level debt. 

VICI said it plans to fund the transaction through a “combination of cash on hand, proceeds from the settlement of existing outstanding forward equity sale agreements and assumption of the remaining 49.9% of the existing property-level debt”.

Together, MGM Grand Las Vegas and Mandalay Bay, comprise over 18m building sqft, 11,000 guestrooms and suites across the two properties, 321,000sqft of gaming space and around 3m sqft of exhibition and meeting facilities across 226 acres on the Las Vegas Strip.

Edward Pitoniak, CEO of VICI Properties, said: “We have been honoured to be BREIT’s partner in the MGM Grand Las Vegas/Mandalay Bay joint venture and this transaction further demonstrates the ability of Blackstone and VICI to work together productively, now and in the future.

“We’re excited to further our investment in MGM Grand Las Vegas and Mandalay Bay, two of the largest and highest-quality resorts in what we believe is the leisure and convention destination with the most compelling future demand outlook.

“This transaction also provides us with the opportunity to further grow our partnership with MGM Resorts International as they look to capitalise on the growing vitality of the South Strip.”

Jon Gray, president and chief operating officer of Blackstone, said: “VICI Properties has been an outstanding partner on these assets and we are incredibly pleased to have delivered such exceptional returns for our BREIT investors. Las Vegas continues to be a high conviction market for Blackstone.”

Scott Trebilco, senior managing director of Blackstone Real Estate, said: “The sale of these assets is an excellent outcome for our BREIT investors and enables us to further concentrate BREIT’s portfolio in its highest growth sectors, including logistics and rental housing.”

BREIT’s redemption requests surpass share repurchase plan

Blackstone has revealed in a notice to BREIT’s shareholders that redemption requests during the final quarter of 2023 have exceeded a 5% of net asset value (NAV) quarterly limit set by BREIT’s share repurchase plan.

The share repurchase plan allows for repurchases of up to 2% of net NAV in any month and 5% of NAV in each quarter.

In October, BREIT honoured repurchase requests of $1.8bn representing 2.7% of NAV. 

Blackstone said BREIT has now received redemption requests exceeding both the 2% of NAV monthly limit and 5% of NAV quarterly limit, “triggering proration for the remaining 2.3% of NAV for the quarter”.

The manager said BREIT repurchased $1.3bn in November, representing the 2% of NAV monthly limit and will also buyback up to 0.3% of NAV in December to reach the 5% of NAV target for the quarter.

Blackstone said unfulfilled repurchase requests will not be carried over automatically, adding that future repurchase requests will continue to be fulfilled in line with the share repurchase plan.

BREIT, Blackstone’s non-exchange traded real estate investment trust, was set up nearly six years ago. As of 31 October this year, the open-ended US real estate trust had $69bn NAV and a total asset value of $125bn.

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