MGM Resorts International (NYSE: MGM) quietly purchased 1.62 acres of land on the Las Vegas Strip last May.
A Google Earth image of Las Vegas Strip land recently acquired by MGM. The operator paid $54 million for the 1.62 acres. (Image: Las Vegas Review-Journal)
The property is located in between the Bellagio and the Cosmopolitan — both of which are operated by MGM. The land is south of the famed Bellagio fountains and MGM paid $54 million for the acreage, according to Clark County property records.
The property purchased by MGM was previously owned by Steve Wynn when he controlled Bellagio, Mirage, and Treasure Island. In 2000, he sold those venues to MGM and the buyer inherited his rights to the 1.62 acres it bought last May.
MGM confirmed the purchase of the land, which is zoned as a vacant lot, to the Las Vegas Review-Journal, but the operator didn’t mention what it intends to do with the property.
Strip Land Deal Interesting Purchase by MGM
The purchase of those 1.62 acres on the Strip by MGM is interesting for a variety of reasons, including the point that the casino giant doesn’t own much real estate on which its gaming venues reside. That’s certainly the case on the Strip where VICI Properties (NYSE: VICI) owns the bulk of the land of MGM-operated casino hotels.
The acquisition of the land becomes even more intriguing when accounting for the various stakeholders involved in ownership of the real estate of Bellagio and Cosmopolitan real estate. MGM sold Bellagio’s property assets to Blackstone’s (NYSE: BX) Blackstone Real Estate Income Trust (BREIT) in 2019. Last August, BREIT sold a 21.9% stake in that property to Realty Income (NYSE: O) for $950 million.
When Blackstone sold Cosmopolitan for for $5.65 billion in September 2021, the real estate of that integrated was acquired by BREIT, Cherng Family Trust and Stonepeak Partners for $4 billion.
Blackstone also owns the property assets of Aria and Vdara, both of which are also operated by MGM.
What MGM Could Do with Strip Land
MGM hasn’t publicly declared an intent for the 1.62 acres it bought, but it’s likely safe to rule out a new integrated resort appearing there because the land is simply too small to accommodate such a venue.
It could also be unlikely that the land is used to adjoin Bellagio and Cosmopolitan because there’s already a covered walkway that starts in Bellagio that leads visitors to an escalator that’s just about 100 feet from Cosmopolitan.
Still, MGM has options for the land. While the operator hasn’t commented to this effect, it’s possible that given its asset-light business model and the appreciation potential of Strip real estate that it eventually sells the 1.62 acres to one of the aforementioned entities that hold interests in the Bellagio or Cosmopolitan real estate.
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