Bellagio $4.2B sale from last week may be most expensive Las Vegas resort deal.
When the Bellagio was developed more than 20 years ago, it was the world’s most expensive hotel ever built.
When it sold last week for more than $4 billion, the deal was, by all appearances, the most expensive sale ever of a Las Vegas resort.
Bellagio owner MGM Resorts International announced Oct. 15 that it reached a deal with New York financial giant The Blackstone Group that calls for their joint venture to acquire the Bellagio’s real estate and lease it back to MGM for an initial annual rent of $245 million.
MGM will receive a 5 percent ownership stake in the joint venture and around $4.2 billion in cash, the casino operator said. The deal is expected to close this quarter.
Known for its outdoor fountain shows and the crowds of tourists who gather to watch them, the Bellagio is a top moneymaker for MGM, and its sales price dwarfs other high-priced hotel- casino deals in Las Vegas.
The closest competitor appears to be the $1.73 billion purchase, in 2014, of The Cosmopolitan of Las Vegas — also by Blackstone, which has been on a real estate buying binge in Southern Nevada for years.
It generated more than $405 million in operating income last year, by far the highest among MGM’s Las Vegas properties.
The Bellagio, at Las Vegas Boulevard and Flamingo Road, features more than 3,900 rooms and 155,000 square feet of casino space and sits on 77 acres of land.
It opened in 1998, cost around $1.6 billion to develop and was acquired in 2000 by the company now known as MGM Resorts International as part of its $4.4 billion buyout of casino developer Steve Wynn’s company Mirage Resorts.
The company also eliminated more than 1,000 jobs as part of its MGM 2020 cost-cutting plan earlier this year.
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