Realty Income Corporation is making an $800m (€689m) perpetual preferred equity investment in the CityCenter Las Vegas real estate assets owned by Blackstone.
NYSE-listed Realty Income said it has agreed to invest in ARIA Resort & Casino and Vdara Hotel & Spa, while Blackstone Real Estate will retain 100% of the common equity ownership of the property.
As part of the deal, Realty Income will retain a right of first offer on a future sale of the common equity interests in the real estate by Blackstone Real Estate.
Located at the centre of the Las Vegas Strip, the ARIA Resort & Casino and Vdara Hotel & Spa include gaming, lodging, luxury retail and upscale dining space, with approximately 5,500 rooms and 500,000sqft of convention space operated and maintained by MGM Resorts International.
The latest transaction is Realty Income’s second investment with Blackstone Real Estate, following the Bellagio Las Vegas joint venture in 2023.
Sumit Roy, Realty Income’s president and CEO, said: “This represents an immediately accretive investment for Realty Income with a favourable initial yield and internal-rate-of-return profile, further demonstrating the value of our size, scale and diversification.
“This transaction adds to an active fourth quarter investment pipeline, which is fully funded from an equity standpoint from a combination of cash, anticipated free cash flow and equity, of which Realty Income had approximately $417m of outstanding cash as of the end of the third quarter and approximately $1.3bn of unsettled forward equity as of today.”
Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, said: “We are pleased to reach this agreement and grow our partnership with Realty Income.
“This preferred equity investment is a terrific outcome for our investors as it returns significant capital while preserving our ownership in a world-class resort at the heart of the Las Vegas Strip.”
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