LAS VEGAS (KTNV) — The financial sector is buzzing that two major strip properties could be involved in a sale.
The beautiful Bellagio and the mighty MGM Grand are two Strip properties worth billions that are reportedly now being eyed by a New York-based private equity firm Blackstone. According to Bloomberg, MGM Resorts International is looking into selling and leasing back properties individually or bundled together.
13 Action News spoke with financial analyst Steve Budin for some perspective.
“They aren’t really in the real estate business,” said Budin. “But they own these very precious pieces of real estate that maybe they could unlock some value.”
Budin says a sale-leaseback deal would allow the company to free up cash for the casino to upgrade or expand. Earlier this year MGM announced layoffs with plans to cut nearly a thousand jobs in order to cut costs and deal with mounting debt.
"So, now they will have billions of dollars to work with to upgrade the nightclubs, the restaurants, the pool areas, the casino floor, “he said. “But if the money is tied up in a building they couldn’t do that.”
Budin said MGM Resorts would continue to manage the property which makes this deal different than the $17.3 billion-dollar merger earlier this summer between Reno-based El Dorado Resorts and Caesars Entertainment. This deal would likely have very little impact on day to day operations or employees.
"Because technically you still work for the MGM, “ said Budin. “Whether the building or the land is owned by somebody else, the MGM is your employer and it will be business as usual."
13 Action News reached out to MGM Resorts International and the Blackstone group and both declined to comment.