MGM REIT speculation heats up

The dominoes are falling as MGM is now being pushed publicly by real estate fund manager Land and Buildings to spin off its real estate assets into a real estate investment trust. An MGM REIT would have a dramatic impact on the Las Vegas market as MGM is the largest hotelier in the city and dominates certain areas of the Las Vegas strip.  I believe if MGM converted to a REIT, it would focus the new REIT on ways to grow its assets, which would mean a greater investment in Las Vegas and a greater intensification of its properties on the strip.  If one considers the excess undeveloped land holdings that MGM owns and the parking space that is currently underutilized, with the value of that property in the hands of a REIT, I think it makes sense for those excess land holdings to be developed.  This would mean greater development at the south end of the strip including space at Mandalay Bay, Luxor, and Excalibur. At the north end of the strip, there is a lot of potential in Circus Circus and the festival lands on the corner of Sahara & the Strip.

As this process unfolds, I wonder about the role of Kirk Kerkorian who is age 97 and who owns about 20% of MGM Resorts International.

RiskingTime

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