Realty Income Corporation will invest $800 million in perpetual preferred equity in the CityCenter Las Vegas real‑estate portfolio, which includes the ARIA Resort & Casino and Vdara Hotel & Spa. The deal, executed with Blackstone Real Estate, gives Realty Income a 7.4% unlevered return and a capped escalator structure that begins five years after closing. The transaction is expected to close on December 9, 2025.
CityCenter is a mixed‑use development on the Las Vegas Strip that was originally a joint venture between MGM Resorts International and Dubai World. In 2021 MGM acquired full ownership of Aria and Vdara from Dubai World and later sold the real‑estate assets to Blackstone for $3.89 billion in a sale‑leaseback transaction, with MGM continuing to operate the properties. Blackstone will retain 100% of the common equity ownership, while Realty Income’s preferred equity stake provides a stable, long‑term income stream without diluting Blackstone’s control.
The investment deepens a partnership that began with a $1.5 billion joint venture at Bellagio in 2023. By adding a preferred equity position in CityCenter, Realty Income diversifies its portfolio beyond its traditional single‑tenant commercial properties and gains exposure to the high‑traffic hospitality sector. The move also signals confidence in the resilience of Las Vegas tourism and the long‑term cash‑flow potential of iconic Strip assets.
The preferred equity carries a 7.4% unlevered return and a capped escalator that starts five years after closing, allowing the return to increase over time up to a predefined cap. If Realty Income has not received an 8.325% unlevered IRR at the time of redemption, a make‑whole payment will be made. Realty Income also retains a right of first offer on any future sale of common equity interests in the portfolio, preserving an option to increase its stake if Blackstone chooses to divest.
Management highlighted the transaction as a “strategic expansion” that supports Realty Income’s goal of increasing its 2025 investment volume guidance to over $6.0 billion. Sumit Roy, President and CEO, noted that the deal is “accretive and aligns with our focus on high‑quality, long‑term cash‑flow assets.” Jacob Werner, Co‑Head of Americas Acquisitions for Blackstone Real Estate, described the transaction as a “terrific outcome” that allows Blackstone to monetize part of its CityCenter investment while retaining ownership and operational control.
The deal positions Realty Income to capture a share of the robust revenue stream generated by the ARIA and Vdara properties, which benefit from strong demand for luxury hospitality and convention space. For Blackstone, the preferred equity structure provides liquidity and a return on capital without relinquishing equity or operational control, reinforcing its strategy of using preferred equity to unlock value in core assets.
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