Barry Diller's People Inc. is offering $12.4 billion for the 74% of MGM Resorts it doesn't already own, valuing the entire company at roughly $18 billion including debt. The per-share price looks generous until you decompose what MGM actually owns and what the buyer is really pricing in.
The Fed held at 3.75%, futures are pricing higher by year-end, and that $20M floating-rate loan you underwrote in 2023 is quietly eating your NOI from the inside. The owners who haven't stress-tested their debt stack against a flat-to-rising rate environment are about to learn what "recalibration" actually costs.
Public hotel REITs are priced like distressed assets while private buyers are paying full freight for the same buildings. That gap is either the market being irrational or a massive arbitrage window that's about to close.
