MGM Growth Properties LLC agreed to pay MGM Resorts International $637.5 million for the repositioning of the former Monte Carlo Resort and Casino in Las Vegas, which is now Park MGM and NoMad Las Vegas.
Under the deal, annual rent payable by MGM Resorts under the existing master lease will increase by $50 million. Ninety percent of the increased rent will be fixed to 2% annual growth until 2022, and thereafter will continue to grow subject to meeting a target tenant revenue-to-rent ratio. The remaining 10% of the rent will be payable in percentage rent.
The property contains 2,700 Park MGM guest rooms and suites, a 5,200-seat theater, as well as the 293-room NoMad Las Vegas hotel by Sydell Group LLC.
MGM Growth will use its cash and available funds from its credit facility to fund the transaction, Chairman and CEO James Stewart said in a release.
The transaction is scheduled to close in the first quarter of 2019, upon fulfillment of customary closing conditions.
Rockefeller Capital Management is the financial adviser to the conflicts committee of MGM Growth's board.