Hard Rock Paying $1.1B For Mirage Resort On Las Vegas Strip
Hard Rock International announced Monday it will pay $1.075B to acquire the operations of The Mirage Hotel and Casino, an iconic property on the Las Vegas Strip, from MGM Resorts International.
The Mirage, which opened in 1989 under then-owner Steve Wynn, is known for an erupting volcano attraction and a Polynesian theme. That's expected to change, as the new owners plan a rebranding and potential redevelopment project topping $1B.
The Hard Rock International is owned by the Seminole Tribe of Florida and has 249 properties under its umbrella, including hotels, casinos, restaurants and music venues in 67 countries. Hard Rock International is headquartered in Hollywood, Florida; the Seminole Hard Rock Hotel & Casino in that city is marked by a $1.5B, 35-story hotel that’s shaped like a guitar and shines spotlights out of its "strings" at night. Another such tower is expected to be built at the Las Vegas property, the company said.
"When complete, Hard Rock Las Vegas will be a fully integrated resort welcoming meetings, groups, tourists and casino guests from around the world to its nearly 80 acre center-Strip location," Hard Rock International Chairman Jim Allen said in a statement, adding that the company would absorb 3,500 Mirage employees as part of the deal.
When it opened with more than 3,000 rooms and a $600M price tag, the Mirage was the largest and most expensive hotel of its time, according to USA Today. It was home to the Sigfried & Roy magic show featuring tigers, and inspired more hoteliers to transform Las Vegas into a luxury destination with over-the-top shows and attractions.
MGM Resorts CEO Bill Hornbuckle said on an earnings call in November that MGM didn’t want to invest more money into the 32-year-old Mirage property.
“There's 77 acres, much of it's really undeveloped in the context of what could be there," he said, according to CNN.
MGM sold Circus Circus in 2019, but still owns about a dozen Las Vegas resorts including Mandalay Bay and MGM Grand. It is also buying the operations of the Cosmopolitan for $1.6B from Blackstone, opening a new casino in Osaka, Japan, and focusing on sports betting in the United States.
For land underneath the Vegas property, Hard Rock International will enter into a long-term lease agreement with VICI Properties, a publicly traded REIT that owns Harrah’s, Caesar’s Palace and other gaming-focused properties and golf courses. Vici announced that initial annual base rent would be $90M, with a base term of 25 years and three 10-year tenant renewal options. VICI Properties, through its Partner Property Growth Fund, may finance a redevelopment project up to $1.5B of the Mirage, the announcement said.
"By working collaboratively with MGM Resorts to sell the Mirage operations we are able to grow our pre-existing partnership with Hard Rock as they expand their gaming operations onto the Las Vegas strip, the most economically productive street in America," VICI Properties President and CEO John Payne said.
A separate Vegas property had been known as Hard Rock Hotel & Casino but was recently converted to a Virgin Hotel. Hard Rock International bought its naming rights in 2020.
The deal with MGM will close in the second half of 2022, assuming it meets regulatory approvals. The property will continue to operate as a Mirage for up to three years as it undergoes rebranding.
