Blackstone Real Estate Income Trust Inc. (BREIT) and MGM Growth Properties LLC (MGP) have entered into a joint venture agreement to purchase the MGM Grand and Mandalay Bay hotel and casinos in Las Vegas in a $4.6 billion deal with MGM Resorts International. MGM Resorts International (MGM) owns the MGM Grand while MGM Growth Properties owns Mandalay Bay.

As part of the deal, MGM Resorts will enter into a long-term lease program with the companies offing a “full corporate guarantee of rent payments.” MGM Resorts will continue to operate the MGM Grand and Mandalay Bay properties with day-to-day responsibility under its care.

Rent for the properties will come in at $292 million a year initially, the companies said. The transaction is expected to close in Q1 2020.

"We are pleased to announce this partnership with BREIT, which illustrates the numerous opportunities available to grow our business and emphasizes the strong institutional demand for gaming real estate assets," James Stewart, CEO of MGM Growth Properties said in a statement.

"Along with the contemplated cash redemption of $1.4 billion of MGM's operating partnership units as announced by MGM, we expect this transaction to be accretive to AFFO while allowing us to maintain pro rata net leverage of 5.6x,” he added.

Blackstone will also purchase $150 million in MGM Growth Properties shares, with 49.9% ownership in the joint venture. MGM Growth Properties will hold the remaining 50.1% shares.

In total, the MGM Grand and Mandalay Bay properties have 9,743 rooms and about 300,000 square feet of casino space that is spread across 226 acres on the Las Vegas Strip.

Blackstone also recently acquired the Bellagio for $4.25 billion.

Shares of MGM Resorts stock were down 0.27% as of 12:34 p.m. EST on Tuesday while shares of MGM Growth Properties stock were up 0.69% at the same time.