After the real estate market crashed, The Blackstone Group was one of many investors to swoop in and buy cheap Las Vegas houses to turn into rentals.
Today, with the economy on strong footing, the New York financial giant is said to be eyeing a more high-profile deal: the purchase of MGM Resorts International’s two biggest moneymakers on the Strip.
Bloomberg reported this week that Blackstone is in advanced talks to buy and lease back Bellagio and the MGM Grand. Terms could not be determined.
The MGM Grand and Bellagio were the top two generators of operating income among MGM’s Las Vegas properties last year, pumping out nearly $710 million combined, a securities filing shows.
Blackstone and MGM declined to comment for this column.
If a deal were finalized — like any transaction, it could always fall apart — it would be the latest acquisition in Las Vegas for a company that has been gobbling up real estate here, a buying spree that has fueled, mirrored and capitalized on the market’s long road back from near-annihilation.
Blackstone, led by billionaire Stephen Schwarzman, bought tens of thousands of houses around the country to rent out after the economy tanked. Las Vegas was ground zero for America’s housing bust, and investors like Blackstone were buying in bulk when others couldn’t buy at all. Locally, the purchases pulled home prices out of the gutter so fast it sparked fears of another bubble.
Blackstone launched Invitation Homes in 2012 for the buy-and-rent venture. Invitation owned more than 900 homes in the Las Vegas area by the end of 2016, not long before its initial public offering, and nearly 3,000 by the end of June, securities filings show.
Outside of housing, Blackstone bought the 68-acre Hughes Center for $347 million in 2013, acquiring a sprawling office park in a region whose office market was clobbered harder by the recession than other areas of commercial real estate.
It also bought downtown’s 5.4 million-square-foot World Market Center for an undisclosed sum in 2017, taking control of a massive furniture-showroom hall that, like countless other projects in the valley, ran into steep financial problems after the economy imploded.
On top of all that, Blackstone has been one of the bigger buyers in one of Las Vegas’ most heated real estate sectors, shelling out hundreds of millions of dollars for apartments over the past few years.
All told, Blackstone has spent a fortune on Las Vegas real estate, and even if the MGM deal fizzles, don’t be surprised if it buys more.
Blackstone announced this month that it closed a $20.5 billion global real estate fund — the biggest ever raised.