Casino giant MGM Resorts International is planning to shift some of its casinos into a separate company that will rent the properties, boost value for shareholders and give companies more flexibility to expand and grow.
MGM Resorts announced on Thursday that the new real estate company will establish a Real Estate Investment Trust (REIT), called MGM Growth Properties LLC. This new investment trust will also own 10 of the MGM Resorts.
MGM Resorts Chief Executive, Jim Murren said that his company will own 70% substantial interest in the new company. The new company is expected to start trading early next year.
The new company will own The Mirage, Mandalay Bay, New York-New York, Luxor Excalibur, Monte Carlo, three regional properties in Mississippi and Michigan as well as The Park pedestrian mall which is still under construction between Monte Carlo and New York-New York.
MGM Resorts will still own and manage MGM Grand, the Bellagio and Circus-Circus properties in Las Vegas. Murren said the reason they are keeping these three properties is due to the fact that they have a lower property tax base than others that MGM Resorts owns. After closing the deal, MGM Resorts will be left with less debt of about $7 billion.
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