Blackstone Real Estate Income Trust (BREIT) formed a 95%/5% BREIT-led joint venture with MGM Resorts International to acquire the real estate assets of the Bellagio in Las Vegas for $4.25 billion. The sale-leaseback transaction, which is expected to close by year end, represents a purchase price multiple of 17.3x rent.

MGM Resorts will lease the property from the JV and continue to manage, operate and be responsible for all aspects of the property on a day-to-day basis. MGM Resorts will sign a long-term lease and continue to be responsible for all operations and capital expenditures of the Bellagio, with the joint venture owning the property and receiving rent payments.

Blackstone’s Jon Gray says, “As big believers in MGM Resorts and Las Vegas, we are thrilled to partner with MGM to acquire the Bellagio on behalf of our BREIT investors. We look forward to a long and productive partnership with this world-class company.”

Separately, MGM is selling the Circus Circus Las Vegas for $825 million to an affiliate of Treasure Island owner Phil Ruffin. MGM says it will use the proceeds from the Bellagio transaction, together with those from the pending sale of Circus Circus Las Vegas, to build a fortress balance sheet and return capital to shareholders.