Blackstone Secures $800 Million Investment in CityCenter Las Vegas
Las Vegas’ CityCenter resort complex, owned by funds affiliated with Blackstone Real Estate (NYSE: BX), is getting an $800 million infusion from investment company Realty Income Corporation (NYSE: O).
The complex, comprised of the ARIA Resort & Casino and Vdara Hotel & Spa, includes gaming, lodging, luxury retail and upscale dining space, with approximately 5,500 rooms and 500,000 square feet of convention space operated and maintained by MGM Resorts International.
The deal is a preferred equity investment, meaning Realty Income will earn a steady return on its capital – it projects an initial return of 7.4% and potential increases after five years – while Blackstone Real Estate will retain 100% of the common equity ownership of the property. MGM will continue to operate both properties.
This transaction is expected to close on Dec. 9, 2025, subject to customary closing conditions.
The preferred equity investment is also subject to an early redemption premium payable to Realty Income of 3% of the preferred equity amount if redeemed prior to the first anniversary of closing, or 2% of the preferred equity amount if redeemed after the first anniversary but before the fourth anniversary of closing. Upon redemption of the preferred equity amount, if Realty Income has not received an 8.325% unlevered internal rate of return on the redeemed amount, it will receive a make-whole payment to ensure that such return is achieved. Realty Income will additionally retain a right of first offer on a future sale of the common equity interests in the real estate by Blackstone Real Estate.
The agreement represents Realty Income’s second investment with Blackstone Real Estate, following the Bellagio Las Vegas joint venture completed in 2023. At the time, Blackstone Real Estate Income Trust, a net asset value-based registered non-traded real estate investment trust, sold Realty Income a 21.9% interest in the Bellagio’s real estate for $950 million, valuing the venue at $5.1 billion. BREIT remains the majority owner of the Bellagio real estate, having paid $4.25 billion for 95% of the property in 2019.
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.”
The property is subject to an existing triple net lease with annual rent escalators and approximately 26 years of remaining initial term, plus three 10-year extension options. In-place rent is significantly well-covered through existing property cash flows.
“This represents an immediately accretive investment for Realty Income with a favorable initial yield and IRR profile, further demonstrating the value of our size, scale, and diversification,” said Sumit Roy, Realty Income’s president and chief executive officer. 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 $417 million of outstanding cash as of the end of the third quarter and approximately $1.3 billion of unsettled forward equity as of today.”
This transaction builds on Blackstone’s extensive investment history in the U.S. casino hub. Blackstone acquired the real estate of Aria and Vdara from MGM in 2021 for $3.89 billion.
Last month, BREIT launched a Delaware statutory trust platform and introduced two new share classes, Class L and Class L-2, aimed at attracting and accommodating ultra-high-net-worth and institutional accredited investors.
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