MGM subsidiary files IPO, to raise up to $1 billion

New York-listed MGM Resorts International’s new real estate subsidiary, which will own ten of the company’s properties, has announced plans for its initial public offering, according to a recent SEC filing.

MGM Growth Properties LLC said it expects to raise up to $100 million from its proposed offering of shares, but according to Renaissance Capital, it is more likely to go up to $1 billion.

MGM Growth says it will operate seven properties on the strip, including Mandalay Bay, Luxor, Excalibur, New York-New York, the Monte Carlo and the company’s new outdoor venue, The Park, as well as three regional resorts which include MGM Detroit, the Beau Rivage in Biloxi, Mississippi and the Gold Strike in Tunica, Mississippi.

MGM Resorts says it will lease back all of the properties and will own a majority of the new subsidiary, which plans to be organized as a real estate investment trust, or REIT.

MGM Growth said in addition to the gaming related properties that it may require from MGM, they will also “seek additional entertainment and gaming relating properties from non-MGM entities.”

“We intend to selectively grow our portfolio of gaming properties through the acquisition of assets that contribute to our tenant and geographic diversification, can be leased subject to long-term leases with tenants with established operating histories, have low operating risks and provide stable cash flows, consistent with our properties,” said the subsidiary.