Realty Income has struck its second major Las Vegas partnership with Blackstone, committing $800 million in perpetual preferred equity to the real estate behind CityCenter, including the ARIA Resort & Casino and Vdara Hotel & Spa while Blackstone retains 100% of the common equity. MGM Resorts will continue operating the properties.
The investment increases Realty Income’s 2025 deployment guidance to more than $6 billion, reinforcing an aggressive capital allocation pace. The preferred equity carries a 7.4% initial unlevered return, includes capped escalators beginning in year five, and comes with redemption protections such as premiums of 3% (within year one) or 2% (years one to four) and a make-whole if Realty Income does not achieve an 8.325% IRR on redeemed amounts.
CityCenter sits on a long-term triple-net lease with 26 years remaining plus three 10-year extension options. Existing cash flows significantly cover in-place rent. The ARIA and Vdara assets collectively include 5,500 rooms and 500,000 square feet of convention space. The deal is expected to close on December 9, 2025, subject to standard approvals.
The deal expands a pipeline that Realty Income says is already fully funded by cash, free cash flow, and unsettled forward equity. As of the end of Q3, the company held $417 million in cash and $1.3 billion in unsettled forward equity.
Blackstone views the structure as a capital-efficient way to unlock liquidity while maintaining full ownership of a flagship Las Vegas property. The two firms previously partnered on the Bellagio joint venture in 2023.
Support: J.P. Morgan, Citi, Deutsche Bank, Goldman Sachs, and Evercore advised Blackstone. Simpson Thacher & Bartlett served as Blackstone’s legal counsel; Latham & Watkins represented Realty Income.
KEY QUOTES
“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 with a favorable initial yield and IRR profile, demonstrating the value of our size, scale, and diversification.”
Sumit Roy, President & CEO, Realty Income
“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.”
Jacob Werner, Co-Head of Americas Acquisitions, Blackstone Real Estate
