Realty Income Makes $800M Equity Investment in Las Vegas Resorts

Realty Income Corporation and Blackstone Real Estate announced an agreement under which Realty Income will make an $800 million perpetual preferred equity investment in the real estate of CityCenter in Las Vegas, comprised of the ARIA Resort & Casino and Vdara Hotel & Spa, which is owned by funds affiliated with Blackstone Real Estate. Blackstone Real Estate will retain 100% of the common equity ownership of the property, which will continue to be operated by MGM Resorts International. This represents Realty Income’s second investment with Blackstone Real Estate, following the Bellagio Las Vegas joint venture completed in 2023.

The perpetual preferred equity investment is expected to carry an initial unlevered rate of return to Realty Income of 7.4% with annual, capped escalators starting on the fifth anniversary of the closing.

The property is subject to an existing triple-net lease with annual rent escalators and approximately 26 years remaining of the initial term, plus three 10-year extension options. In-place rent is significantly well-covered through existing property cash flows.

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