Hard Rock International, owned by the Seminole Tribe of Florida, has announced it will acquire the operations of Las Vegas’ 3,044-room Mirage Hotel & Casino from MGM Resorts International for $1.075 billion.
The deal is subject to regulatory approvals and other customary closing conditions.
The hotel was developed in 1989 by Steve Wynn, and acquired by MGM in 2000. MGM Resorts' spinoff real estate investment trust, MGM Growth Properties, owns the real estate of the Mirage. Gaming REIT Vici Properties announced in August it was acquiring MGM Growth Properties in a $17.2 billion deal.
In a news release, MGM Resorts said for the 12 months ending Dec. 31, 2019, the Mirage “reported adjusted property [earnings before interest, taxes, depreciation, amortization and restricting and rent costs] of $154 million."
"At the closing of the transaction, MGM Resorts’ master lease that currently includes the Mirage property will be amended to reduce the annual rent by $90 million. [MGM] expects net cash proceeds after taxes and estimated fees to be approximately $815 million,” the company stated.
MGM Resorts also announced in September that it will manage Las Vegas’ The Cosmopolitan, following Blackstone Real Estate Partners’s $5.65-billion sale of the property to the Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Investment.
According to the Seminole Tribune, the official newspaper of the Seminole Tribe of Florida, the Mirage will be reconfigured in the shape of a guitar, similar to the Seminole Hard Rock Hotel & Casino in Hollywood, Florida.
The cash deal is for a long-term lease with Vici Properties.
It is Hard Rock International's first involvement in the gaming city.
In a news release, Hard Rock International said “prior to 2020, [it] had no previous involvement with the Hard Rock Hotel & Casino in Las Vegas, [but that it] purchased the licensing and naming rights for Hard Rock Hotel & Casino Las Vegas in May 2020 and vowed to bring the iconic brand to the Las Vegas Strip when the right opportunity presented itself.”
Jake Waller, managing director of gaming business advisory New World Gaming, said the deal is indicative of the U.S. hotel transaction market not being slowed down by the pandemic.
“The U.S. market is always buying and selling. It is not immune to COVID-19, but it is moving a lot faster than the rest of the world,” he said.