You Won't Believe How $800 Million is Set to Transform CityCenter Las Vegas—Find Out Now!

Realty Income Corporation, known as The Monthly Dividend Company®, has announced a significant step in its investment strategy by increasing its 2025 investment volume guidance to over $6.0 billion. This revision comes on the heels of a definitive agreement to make an $800 million perpetual preferred equity investment in the CityCenter real estate located at the heart of the Las Vegas Strip. This prime property includes the ARIA Resort & Casino and the Vdara Hotel & Spa, both of which are owned by funds affiliated with Blackstone Real Estate.

The partnership marks Realty Income's second investment with Blackstone, following the successful joint venture involving the Bellagio Las Vegas completed in 2023. Under this agreement, Blackstone will retain 100% of the common equity ownership of the property, while operations will continue under the management of MGM Resorts International.

Sumit Roy, Realty Income's President and CEO, expressed enthusiasm about the investment, stating, "We are pleased to build on our strategic relationship with Blackstone Real Estate to invest in one of the Las Vegas Strip's iconic properties. 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." The investment is expected to provide Realty Income with an initial unlevered rate of return of 7.4%, with capped annual escalators starting on the fifth anniversary of the closing.

The investment is structured to include an early redemption premium, which is set at 3% of the preferred equity amount if redeemed within the first year and 2% if redeemed after the first year but before the fourth anniversary. Realty Income will also receive a make-whole payment, ensuring that the 8.325% unlevered IRR is achieved should the preferred equity amount be redeemed.

This transaction, slated to close on December 9th, 2025, is subject to customary closing conditions. Realty Income has positioned itself to fund the investment pipeline aggressively, citing approximately $417 million in outstanding cash and about $1.3 billion of unsettled forward equity as of the current date.

Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, commented on the agreement, noting, "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 properties involved in this transaction are currently subject to a triple net lease with annual rent escalators and approximately 26 years remaining on the initial term, not including three additional ten-year extension options. The in-place rent is notably well-covered by existing property cash flows, thereby strengthening the investment’s appeal.

Located centrally on the Las Vegas Strip, the ARIA Resort & Casino and Vdara Hotel & Spa feature approximately 5,500 rooms and 500,000 square feet of convention space, providing a blend of gaming, luxury lodging, retail, and upscale dining experiences managed by MGM Resorts International.

This strategic investment reflects Realty Income's ongoing commitment to enhancing its portfolio and providing reliable dividends to its investors. Founded in 1969, Realty Income has built a robust portfolio of over 15,500 properties across all 50 U.S. states, the U.K., and seven other countries in Europe. It is renowned for its dependable monthly dividends that have increased consistently over time.

As Realty Income and Blackstone continue to forge their partnership, this investment illustrates the evolving landscape of real estate finance and the strategic moves companies are making to secure advantageous positions in high-value markets like Las Vegas.