New York firms betting billions on Strip real estate

You won’t spot their names connected Las Vegas Boulevard marquees, and you whitethorn not person adjacent heard of them.

But 2 heavyweight firms, Vici Properties and The Blackstone Group, are emerging arsenic 2 of the biggest players connected the Strip.

Their role? Collecting rent.

Vici, a Caesars Entertainment spinoff, announced a $17.2 cardinal woody Wednesday to get MGM Resorts International spinoff MGM Growth Properties, giving Vici existent property ownership of galore of the biggest hotel-casinos connected the Strip.

Blackstone has its ain increasing portfolio of hotels connected Las Vegas Boulevard, and overall, the 2 companies are slated to ain much than a twelve megaresorts combined on the famed casino corridor, mostly arsenic landlords.

All this wheeling and dealing astir apt has little, if any, effect connected guests astatine the properties oregon immoderate contiguous interaction connected the employees, different than changing wherever companies nonstop their rent checks.

But the 2 New York firms are betting billions that tourism present volition thrive — and that casino operators tin wage a luck successful rent.

‘On clip and successful cash’

Vici, a casino landlord, and Blackstone, a fiscal conglomerate, are buying hotels arsenic Las Vegas bounces backmost from the still-raging coronavirus outbreak, which dealt a catastrophic economical stroke to Southern Nevada.

The pandemic temporarily turned the Strip into a shade municipality of shuttered resorts past year, sparked immense occupation losses successful the casino-heavy region, and kept radical location and distant from crowds for fearfulness of getting infected, devastating the tourism industry.

The landlords’ enactment of business, however, seems to beryllium fine.

Vici CEO Ed Pitoniak said connected a league telephone Wednesday that some MGM Growth and his institution person collected “100 percent of our rent truthful acold done COVID connected clip and successful cash.”

Vici’s existent property holdings see Caesars Palace and Harrah’s Las Vegas. In aboriginal March, it besides announced a woody with Apollo Global Management to acquisition The Venetian, Palazzo and Sands Expo and Convention Center for astir $6.25 cardinal from casino relation Las Vegas Sands Corp., with Vici acquiring the existent property and Apollo buying the operations side. The woody is expected to adjacent aboriginal adjacent year.

With its purchase of MGM Growth, Vici is buying respective MGM Resorts-operated properties, including The Mirage, Park MGM, Luxor, New York-New York and Excalibur.

Betting billions

Blackstone not lone dropped $1.73 cardinal successful 2014 for The Cosmopolitan of Las Vegas, it besides has a past of multibillion-dollar existent property deals with MGM Resorts.

As announced successful aboriginal July, Blackstone is buying the Aria and Vdara hotels for astir $3.9 cardinal and leasing them backmost to MGM. Blackstone besides partnered with MGM Growth connected a $4.6 cardinal woody early past twelvemonth to get the MGM Grand and Mandalay Bay’s existent property and lease them backmost to MGM Resorts, with Vici saying this week it volition clasp MGM Growth’s involvement successful the venture.

Moreover, Blackstone bought the Bellagio successful 2019 for astir $4.2 cardinal from MGM Resorts and leased it back.

As you tin imagine, leasing a edifice with thousands of rooms is not cheap. The Bellagio sale, for instance, called for an archetypal yearly rent of $245 million.

Las Vegas’ tourism manufacture has by nary means afloat recovered from the pandemic, and the nationalist wellness situation is acold from over. But the section system has travel a agelong mode since the aboriginal chaos of the outbreak, and Las Vegas is inactive a spot wherever radical walk large connected hotels — not to notation gambling and booze.

“As overmuch arsenic parents similar to walk wealth connected their kids, whether successful Orlando and different locations, I don’t deliberation anybody’s ever spent $10,000 connected a vessel of pome juice,” Pitoniak said this week.

The Review-Journal is owned by the household of Dr. Miriam Adelson, the bulk shareholder of Las Vegas Sands Corp. Las Vegas Sands operates The Venetian, Palazzo and Sands Expo and Convention Center.

Contact Eli Segall astatine esegall@reviewjournal.com oregon 702-383-0342. Follow @eli_segall connected Twitter.