MGM Acquires Small Strip Parcel in Last Spring Deal

In a recent acquisition, MGM Resorts Land Holdings purchased a small piece of land measuring 1.62 acres on May 15, 2023, south of the Bellagio fountains. The land, which is currently a parking lot and garbage storage space, sits between the Bellagio and The Cosmopolitan, both operated by MGM. The Strip is not visible from the new land due to existing trees in the area.

The previous owner of the land was Steve Wynn, a prominent real estate developer and art collector responsible for creating popular casinos in Las Vegas. Wynn sold The Mirage, Bellagio, and Treasure Island to MGM almost 25 years ago, and the latter inherited the rights to the 1.62 acres it recently purchased. As of January 12, 2024, Wynn’s real-time net worth is estimated to be $3.4 billion.

The purchase is significant for MGM as the casino giant does not own much real estate underneath the gaming venues it operates, largely due to the ownership of most casino hotel land by NYSE-listed VICI. Additionally, the involvement of multiple stakeholders in the ownership of the real estate of Cosmopolitan and Bellagio makes the land purchase even more interesting.

In 2019, MGM sold Bellagio’s property assets to NYSE-listed Blackstone’s Blackstone Real Estate Income Trust (BREIT). The Trust later sold a 21.9% stake in the property to NYSE-listed Realty Income for $950 million. In September 2021, Blackstone announced the sale of Cosmopolitan for $5.65 billion, with BREIT, Stonepeak Partners, and the Cherng Family Trust acquiring the real estate for $4 billion.

With the limited size of the newly acquired land, MGM is unlikely to build a new integrated resort or join Bellagio and Cosmopolitan given the existing walkway between the two properties. One possibility is for MGM to sell the land to one of the entities holding interests in the real estate associated with Cosmopolitan and Bellagio.