Realty Income Corp. has agreed to acquire a 21.9% stake in Bellagio Las Vegas from Blackstone Real Estate Income Trust Inc. (BREIT) for $950 million ($300 million in common equity and $650 million in preferred equity). BREIT will retain a 73.1% interest in the property. MGM Resorts International holds the remaining 5%.
The Bellagio, situated at the center of the Las Vegas Strip in Las Vegas, Nevada, is subject to an existing triple net lease with approximately 26 years of remaining term and is operated and maintained by MGM. The AAA Five Diamond Resort features approximately 4,000 guestrooms and suites across two towers, 157,000 square feet of gaming space and 200,000 gross square feet of meeting and event facilities. Located on a 77-acre campus, the resort also includes the Fountains of Bellagio and multiple Michelin Star restaurants.
“Realty Income seeks to invest in high-quality real estate at scale in partnership with operators who are leaders in their respective industries. This transaction to acquire an interest in the Bellagio, an iconic property, represents our second investment in the gaming industry and exemplifies the advantages of our size, scale and access to capital,” said Sumit Roy, Realty Income’s president and CEO. “We are pleased to initiate our Credit Investment platform through a preferred equity investment in the Bellagio joint venture. Credit Investments are a natural adjacency to our traditional business, allowing us to provide additional value to our clients while leveraging our core competencies in transaction sourcing and structuring, and real estate and credit underwriting and monitoring.”
The transaction is expected to close in the fourth quarter of 2023 and is subject to customary closing conditions.
PJT Partners served as lead financial advisor to BREIT, and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, SG Americas Securities LLC, Desjardins Capital Markets and Mizuho Securities USA LLC also served as financial advisors. Simpson Thacher & Bartlett LLP is acting as BREIT’s legal counsel.
