MGM Resorts International and Blackstone Real Estate Income Trust are forming a joint venture that will buy MGM’s Bellagio real estate and lease it back to an MGM Resorts unit, the companies announced.

Under the deal, MGM will receive cash proceeds of roughly $4.2 billion and its subsidiary will pay $245 million in annual rent. MGM will keep a 5% equity stake in the venture.

The deal for the Bellagio values the property at $4.25 billion or more than 17 times rent.

At the same time, MGM announced it had reached a deal to sell its Circus Circus Las Vegas property for $825 million.

The buyer for the Circus Circus property is an affiliate of Phil Ruffin, owner of Treasure Island. In a statement, MGM said the property had an adjusted EBITDA of $62 million for the twelve months ended June 30. The deal comprises a $662.5 million cash payment and a $162.5 million note due in 2024.

“We want to make sure — if and when the next recession comes — we have a fortress balance sheet,” said Paul Salem, chairman of MGM’s real estate committee of the company’s board of directors.

He called the Circus Circus property non-core.

In January, activist investor Keith Meister, who founded Corvex Management, was given a seat on the MGM board after building a roughly 3% stake in the company.

“Keith was on our real estate committee and he was very active on it. But before he joined the board we were on this path anyway,” Salem said. He also called Meister a “pleasure” to work with.

MGM Resorts was advised by JPMorgan on the Bellagio transaction. Blackstone was advised by Citigroup Global Markets and Morgan Stanley.

MGM’s advisors on the Circus Circus transaction were Morgan Stanley and CBRE. That deal is expected to close in the fourth quarter.

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