MGM Growth Properties’ $4.6 Billion Joint Venture with Blackstone Real Estate Income Trust

Morgan Stanley & Co. LLC and Evercore served as financial advisors to MGM Growth Properties, and Hogan Lovells US LLP served as legal counsel. Rockefeller Capital Management acted as financial advisor to the conflicts committee of the MGP Board of Directors, and Potter Anderson & Corroon LLP served as legal counsel. Citigroup Global Markets Inc. served as financial advisor to BREIT. Citigroup Global Markets Inc., Barclays Capital Real Estate Inc., Deutsche Bank AG, and Societe General served as BREIT’s financing advisors. Simpson Thacher & Bartlett LLP served as legal counsel to BREIT. Fried Frank acted as counsel to Morgan Stanley and Evercore. Greenberg Traurig, LLP served as Nevada and Gaming counsel to BREIT.

MGM Growth Properties LLC (NYSE: MGP) and Blackstone Real Estate Income Trust, Inc. entered into a definitive agreement to form a new joint venture to acquire the Las Vegas real estate assets of the MGM Grand and Mandalay Bay for $4.6 billion. In addition, BREIT will purchase $150 million in MGP Class A shares. MGP will own 50.1% of the joint venture, and BREIT will own 49.9%. This transaction is expected to close in the first quarter of 2020.

At closing, MGM Resorts International (NYSE: MGM) will enter into a long-term triple net master lease for both properties and provide a full corporate guarantee of rent payments. MGM Resorts will continue to manage, operate and be responsible for all aspects of the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments.

Together, the MGM Grand and Mandalay Bay comprise 9,743 rooms, approximately three million square feet of meeting space and approximately 300,000 square feet of casino space across 226 acres on the Las Vegas Strip. MGM Resorts’ initial annual rent will be $292 million. MGP currently owns the Mandalay Bay real estate, and MGM Resorts currently owns the MGM Grand real estate.

MGP is one of the leading publicly traded real estate investment trusts engaged in the acquisition, ownership, and leasing of large-scale destination entertainment and leisure resorts, whose diverse amenities include casino gaming, hotel, convention, dining, entertainment, and retail offerings.

BREIT is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors. 

The Simpson Thacher team included Erik Quarfordt (Picture), Greg Ressa, Jason Mohr, Aryeh Goldman, Sam Rudik, Carla Elliott and Margaret Finnegan (Real Estate); Nancy Mehlman, Sarah Katz and Edward Grais (Tax); Brian Stadler, Matthew Rogers, Andrew Kofsky and Daniel Levien (M&A); Edgar Lewandowski, Benjamin Wells and Eva Kang (Capital Markets); and Andrew Blau and Jeanne Annarumma (Executive Compensation and Employee Benefits).

The Fried Frank team was led by corporate partner Philip Richter and included corporate associate Roy Tannenbaum.

Greenberg Traurig’s deal team was led by Jim Mace and included Shareholder Mark A. Clayton (Chair of Greenberg Traurig’s Global Gaming Practice); Shareholder Gregg Vermeys (Real Estate); Shareholder Jonathan I. Lessner (Corporate); Of Counsel Chris Thorne (Real Estate and Energy & Natural Resources); Associate Pete J. Georgis (Real Estate and Corporate); Associate David Edington (Real Estate); and Paralegal Trisha Lamb.

Potter Anderson advised the conflicts committee of MGM Growth Properties with a team which included partners Mark Morton and Tom Mullen and associates Alyssa Ronan, Garrett Lyons and Joseph Farris.

Involved fees earner: Philip Richter – Fried Frank Harris Shriver & Jacobson; Roy Tannenbaum – Fried Frank Harris Shriver & Jacobson; Aryeh Goldman – Gornitzky & Co.; Mark Clayton – Greenberg Traurig LLP; David Edington – Greenberg Traurig LLP; Pete Georgis – Greenberg Traurig LLP; Jonathan Lessner – Greenberg Traurig LLP; Jim Mace – Greenberg Traurig LLP; Christopher Thorne – Greenberg Traurig LLP; Gregg Vermeys – Greenberg Traurig LLP; Garrett Lyons – Potter Anderson & Corroon LLP; Mark Morton – Potter Anderson & Corroon LLP; Thomas Mullen – Potter Anderson & Corroon LLP; Alyssa Ronan – Potter Anderson & Corroon LLP; Jeanne Annarumma – Simpson Thacher & Bartlett; Andrew Blau – Simpson Thacher & Bartlett; Carla Elliott – Simpson Thacher & Bartlett; Margaret Finnegan – Simpson Thacher & Bartlett; Edward Grais – Simpson Thacher & Bartlett; Eva Kang – Simpson Thacher & Bartlett; Sarah Katz – Simpson Thacher & Bartlett; Andrew Kofsky – Simpson Thacher & Bartlett; Daniel Levien – Simpson Thacher & Bartlett; Edgar Lewandowski – Simpson Thacher & Bartlett; Nancy Mehlman – Simpson Thacher & Bartlett; Jason Mohr – Simpson Thacher & Bartlett; Erik Quarfordt – Simpson Thacher & Bartlett; Gregory Ressa – Simpson Thacher & Bartlett; Matthew Rogers – Simpson Thacher & Bartlett; Samuel Rudik – Simpson Thacher & Bartlett; Brian Stadler – Simpson Thacher & Bartlett; Benjamin Wells – Simpson Thacher & Bartlett;

Law Firms: Fried Frank Harris Shriver & Jacobson; Gornitzky & Co.; Greenberg Traurig LLP; Potter Anderson & Corroon LLP; Simpson Thacher & Bartlett;

Clients: Blackstone Real Estate Income Trust, Inc.; Evercore Inc.; MGM Growth Properties – Conflicts Committee; Morgan Stanley;