Blackstone Real Estate Income Trust, a publicly registered non-traded REIT sponsored by private equity giant The Blackstone Group (NYSE: BX), confirmed the closing of the previously announced purchase the real estate assets of The Bellagio Las Vegas for $4.25 billion in a sale-leaseback transaction and joint venture with MGM Resorts International (NYSE: MGM).
As previously reported by The DI Wire, Blackstone REIT will own 95 percent of the joint venture, while MGM Resorts will own the remainder.
MGM Resorts has agreed to lease the property from the joint venture and continue to manage, operate and be responsible for all aspects of the property on a day-to-day basis. The lease is expected to have an initial annual rent of $245 million with an initial term of 30 years with two 10-year extension options for MGM. The rent will escalate annually at a rate of 2 percent per year for the first 10 years.
The Bellagio is a luxury resort located on 77 acres at the center of the Las Vegas strip, with 3,933 hotel rooms, an approximately 155,000 square feet gaming floor, 94,000 square feet of retail space and 200,000 square feet of meeting and ballroom space.
Blackstone Real Estate Income Trust originally registered $5 billion in shares and accepted gross offering proceeds of $4.9 billion from January 1, 2017 to January 1, 2019. The company later registered a $12.0 billion follow-on offering. As of Nov. 14, 2019, the company had received net proceeds of $11.5 billion from selling shares in both offerings.
As of the end of the third quarter of 2019, the REIT owned 1,022 properties purchased for $22 billion and had 182 positions in real estate-related securities and loans totaling $3.8 billion. The company currently invests in multifamily, industrial, hotel, and retail properties, and real estate-related securities and loans.