MGM Resorts ‘in early stages’ of selling The Mirage

MGM Resorts International is looking to sell the operations of The Mirage, company CEO Bill Hornbuckle said Wednesday.

“I mentioned in the past that we are happy with the amount of exposure we currently have in Las Vegas. As such, we are currently in the early stages of a process to sell the operations of the Mirage,” Hornbuckle said Wednesday during a quarterly earnings call.

Hornbuckle did not mention an asking price for the property or any potential buyers.

The selling of The Mirage would be the latest in a flurry of recent casino transactions as operators look to capitalize on what has become a hot market for Las Vegas Strip properties since the gaming and tourism industries roared back from the COVID-19 pandemic faster than most expected.

MGM’s decision to sell a property came down to capital allocation and wanting to diversify the company’s holdings, which made The Mirage “the obvious choice,” Hornbuckle said.

The company currently operates 10 resorts on the Strip — MGM Grand, Bellagio, Aria, Vdara, Excalibur, Luxor, Mandalay Bay, The Mirage, New York-New York and Park MGM — and will soon add The Cosmopolitan into its portfolio.

“We have enough of Las Vegas,” Hornbuckle said.

Originally developed by Steve Wynn on the former Castaways site, The Mirage opened its doors in November 1989 and helped lead the way in the megaresort boom on the Strip. MGM acquired the resort in 2000 when it bought Mirage Resorts for $4.4 billion.

Hornbuckle, who was part of the team that helped open The Mirage more than three decades ago, believes the resort still has plenty to offer with the property’s renowned villas and its center-Strip location on 77 acres.

“This is an amazing property and I’m excited for somebody to come in and make it their marquee property,” he said. “I think the right owner could do a lot. But it just fell pretty far down in the spectrum of how much in capital we’d allocate to it in any given period of time in the near future. And so we just took a strategic decision to sell it.”

As for MGM’s other properties, Hornbuckle indicated in a letter to employees that the company has no major changes on the horizon.

“We are committed to continuing to maintain and develop our existing Las Vegas portfolio, with no plans for other changes on the Strip at this time,” Hornbuckle wrote in the letter sent Wednesday.

Changing its portfolio

The gaming giant recently announced that it was purchasing the operations of The Cosmopolitan of Las Vegas for $1.6 billion.

It also recently moved to buy out its partner in CityCenter for $2.1 billion, and take full control of The Aria and Vdara resorts, then turned around and sold the property to The Blackstone Group for nearly $3.9 billion in a leaseback deal.

The underlying real estate of the Mirage is owned by MGM Growth Properties, which is being bought by New York-based Vici Properties in a $17.2 billion deal that was announced in August and expected to close in the first half of 2022. MGM Resorts still owns the operations of the resort, which is what the company is looking to sell.

One of the other major strip operators, Caesars Entertainment, is also looking to sell one of its Las Vegas Strip properties. Caesars CEO Tom Reeg said Tuesday the company is looking to start that process in early 2022, although the company has yet to say which property it is looking to offload.

In Caesars earnings call on Tuesday, Reeg that “this is an opportune time” to sell a Strip property.

Hornbuckle and MGM clearly agree.

MGM Resorts reported a third quarter net income of $1.3 billion on $2.7 billion in net revenues for the three month period ending Sept. 30. That compared to a net loss of $602 million on $1.1 billion in revenues in the third quarter of 2020. MGM shares closed Wednesday up 82 cents, or 1.7 percent, at $48.70 on the New York Stock Exchange.

Contact Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.