The Massachusetts Gaming Commission began Thursday, June 24, to wade through a complex proposed real estate transaction that would boil down to the MGM Springfield land and property being sold to MGM’s real estate investment trust for $400 million, and it being leased back to MGM Resorts for $30 million annually to continue to operate the casino, reports the WWLP.
When the transaction was announced, the real estate investment trust, MGM Growth Properties, said it expected no change to MGM Springfield’s “employees, vendors, customers, and the community.” Even if the sale and change could have no significant impacts on the operations of the casino, the first to open under the Bay State’s 2011 expanded gaming law, the Gaming Commission must scrutinize each of the various moving parts and vote on whether to approve the transfer.
The CEO of MGM Growth Properties James Stewart, said: “We are excited to add MGM Springfield to our portfolio of high-quality gaming resort real estate and are encouraged by the property’s recent record financial performance. This transaction reflects the continued execution of our growth strategy.”
When announced in May, the transaction was expected to close by the end of 2021. MGM Resorts has executed similar transactions with other properties around the country as part of an “asset-light” strategy that frees up liquid cash that the company can invest in other casinos, pursue sports betting expansion, or benefit shareholders.
“As a growth-oriented public real estate entity, MGP expects its relationship with MGM Resorts and other entertainment providers to attractively position MGP for the acquisition of additional properties across the entertainment, hospitality, and leisure industries,” the company said in its press release.