Home News MGM Shares Plans for Its New Las Vegas Strip Property

MGM Shares Plans for Its New Las Vegas Strip Property

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The Las Vegas Strip has become some of the hottest real estate on the planet. The 4.2-mile road has become a battlefield for intruders like Resorts World Las Vegas to overthrow established market leader Caesars Entertainment. (CZRMore)- Get the Caesars Entertainment Inc. ReportMGM Resorts International (MGM)- Get the MGM Resorts International Reportand win reports (win)- Get the Wynn Resorts Limited Report.

The Las Vegas Strip has become the land of celebrities, with celebrity chefs bringing their signature restaurants to high-profile street billboards. Gone are the days when most Vegas headliners were kitsch Husbys (although some of them still exist). Today, big stars like Adele, Lady Gaga, Katy Perry, Aerosmith, and just about every major DJ play regularly on the Las Vegas Strip.

Caesars and MGM control the southern and central parts of the Strip, and neither company leads the industry. a little self-satisfactionThe two companies are making big changes, including Caesars rebranding Bally’s Casino under the gambler-friendly Horseshoe brand, while also attempting to sell the Flamingo resort casino.

MGM didn’t sit still as it sold Mirage and bought Cospolitan. It’s an interesting deal, and CEO Bill Hornbuckle has shared some of the plans for the company’s newest luxury Las Vegas Strip real estate.

Cosmopolitan joins the MGM family

Hornbuckle noted that MGM will sell the property to Vici Properties. (Vici)- Get the VICI Properties Inc. Report(which also owns many properties on the Caesars Strip) as a way to free up cash during the company’s term. 2nd Quarter Financial Results Announcement.

“With the completion of a strategic transaction between MGM Growth Properties and Vici, we took another significant step in April to simplify our corporate structure and complete the monetization of our real estate assets. Received $4.4 billion in cash, which we plan to use to invest in our core businesses while continuing to pursue meaningful growth opportunities, one of which officially closed in May It was the acquisition of The Cosmopolitan of Las Vegas that was announced.”

The CEO said he spent some time on new acquisitions that weren’t fully integrated into MGM’s loyalty program and booking platform.

“Our current focus is on integrating property operations into the MGM Resorts portfolio and working together to maximize the future success of this world-class resort.

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How is Cospolitan added to MGM?

While it will take time to fully add Cosmopolitan to MGM’s portfolio, CFO Jonathan Halkyard said the deal has already paid off in several ways.

“Certainly, there are synergies in this deal. “I am proud that the day after we completed the transaction, their employees (CoStar) were able to park in the Bellagio garage, so they were bussed from a distance.”

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Convenient employee parking may sound like a small thing, but it increases your company’s efficiency and keeps your employees happy in a highly competitive job market.

The acquisition was also financially positive in its early stages.

“In the six weeks we owned Cosmopolitan of Las Vegas in the second quarter, we generated just under $60 million in EBITDAR. [earnings before interest, taxes, depreciation, amortization, and rent]So this business is doing well right now,” he added.

Hornbuckle also says luxury properties are performing well, even when the economy is sluggish.

“Look, anything related to luxury and high-end retail can obviously fit that case. Bellagio, Aria, now the Cosmopolitan part of MGM and part of Mandalay are doing surprisingly well.” he said.

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