You may not have thought it would be possible, but Las Vegas has outdone itself again. The city famous for its extravagant casinos has just announced the sale of the Bellagio Hotel for a cool $4 billion. An iconic landmark with its famous dancing fountains, the vista of the Bellagio Hotel has become one of Las Vegas’ most recognisable sights along with its vast five-star offerings.
A milestone for the hospitality industry, when the Bellagio was built some 20 years ago it was considered the most expensive hotel ever built. What has been said as the largest single trade in the history of the world-renowned strip, the owner of Bellagio – MGM Resorts International announced recently on 15th October that it came to a deal with New York based financial conglomerate The Blackstone Group.
Moving forward collaboratively, The Blackstone Group will lease the Bellagio Hotel back to MGM for an initial annual rent of $245 million. With around $4.2 billion in cash and a 5% stake in ownership, the Bellagio was a valuable asset to MGM, and this recent sale resumes a new era for the group. Continuing to fully manage the property under this new agreement, it has also been recently announced that the Las Vegas based casino company may also be selling off other assets within its portfolio including the Circus Circus property also located on the strip, with its 47 adjoining acres to property master Phil Ruffin for $825 million.
LegitimateCasino.com commented on the significance of this recent sale. Understanding this represents a shift in the luxury casino industry, a spokesperson from the leading online casino group, commented: “This sale is a reflection of the global economy slowing down. It is also an opportunity for MGM to generate a cash buffer whilst also spread its wings internationally.”
Utilising proceeds of the sale to boost its balance sheet whilst returning capital to its shareholders, setting their sights on new destinations globally – MGM has no plans to develop any more casinos in Las Vegas.
Situated at a mid-point along the strip, beyond its famous dancing fountains, the Bellagio Hotel features retro touches alongside an interior of neoclassical Roman design across a vast 4,000 rooms. The hotel also boasts some of the city’s finest facilities. From its huge casino and shopping outlets, the property also plays host to what is considered the best collection of pools with glamourous cabana day beds. For evening entertainment, this luxury destination is home to the Cirque du Soleil show ‘O’ within its theatre whilst for culture, there is a fine art gallery.
One of Las Vegas’ most popular dining spots, the Bellagio also encompasses almost 20 different food and beverage options. From casual coffee spots to some of the city’s best fine-dining restaurants, from gourmet French cuisine at Le Cirque, to another restaurant which features the opportunity to dine with pieces of work from Picasso, the Bellagio is also dotted with juice and pool bars, available to both visitors and hotel guests.
The recent sale of the Bellagio which represents 17.3 times the initial annual rent of $245 million, moves MGM one step closer towards its restructuring plan to become a landless casino company following pressure from investors. Understanding that the casino industry is fast evolving, the group now plans to focus their efforts and intellectual capital instead with sports and live entertainment to reduce leverage, by also cutting and reorganising the management of the group. Part of this restructure includes the introduction of MGM’s new property venture MGM Growth Properties INC, a real estate investment trust the group created three years ago where it has sold all but four of its wholly-owned casinos.
Providing a benchmark to attract bidders towards MGM’s other real estate assets, it is an exciting time for MGM. As the group enters a new chapter, MGM has announced its international plans to invest billions of dollars into a new casino in Osaka, Japan whilst focusing its plan on sports betting across the United States. This hugely significant sale was considered a ‘sacred’ asset to the group and was one of the last to sell due to its importance to the group.
Image credit at the very top of the article: bennymarty/Bigstock.com
