Blackstone sells US$800 million stake in Las Vegas strip resorts
The deal is expected to close on Dec 9
[NEW YORK] Blackstone is selling a preferred equity stake in the CityCenter Las Vegas complex to Realty Income in a deal that lets the alternative asset manager cash in on its investment while retaining control of the property.
Realty Income is making an US$800 million perpetual preferred equity investment in CityCenter, which includes the Aria Resort & Casino and the Vdara Hotel & Spa, according to a statement on Monday (Dec 1).
Blackstone Real Estate is retaining 100 per cent of the common equity ownership in the property, which is operated by MGM Resorts International, according to the statement.
Blackstone, a seasoned hospitality investor, has invested heavily in Las Vegas, betting on properties including the Bellagio and the Cosmopolitan hotels.
Funds managed by the firm paid US$3.89 billion to acquire Aria and Vdara real estate assets in a 2021 deal with MGM Resorts. The hotels include roughly 5,500 rooms in addition to 500,000 square feet of convention space and high-end shops.
Realty Income, led by chief executive officer Sumit Roy, invested US$950 million in the Bellagio in a 2023 transaction with Blackstone.
The CityCenter deal is structured to deliver Realty Income an unlevered rate of return of at least 8.3 per cent when the shares are redeemed. Initial annual returns of 7.4 per cent begin stepping up after five years, according to the statement.
Realty Income retains a right of first offer on a future sale of Blackstone’s common equity interests in the property, according to the statement. The deal is expected to close on Dec 9. BLOOMBERG
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