Blackstone Divests CityCenter Las Vegas Stake to Realty Income for $800M
Posted on: December 1, 2025, 04:26h.
Last updated on: December 1, 2025, 04:26h.
- Private equity firm acquired CityCenter real estate in 2021
- The REIT is acquiring a preferred equity interest
- It’s Realty Income’s third casino deal and second with Blackstone
Blackstone’s (NYSE: BX) Blackstone Real Estate Income Trust (BREIT) and Realty Income (NYSE: O) announced today that the latter is paying $800 million for a “perpetual preferred equity investment” the real estate of CityCenter Las Vegas.
That property is home to the ARIA Resort & Casino and Vdara Hotel & Spa, both of which are operated by MGM Resorts International (NYSE: MGM). The operational status of those venues will not change as a result of the Blackstone/Realty Income deal. The private equity company said its BREIT arm will retain 100% ownership of the common equity tied to CityCenter.
The perpetual preferred equity investment is expected to carry an initial unlevered rate of return to Realty Income of 7.4% with annual, capped escalators starting on the fifth anniversary of the closing,” according to a statement. “The preferred equity investment is 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.”
Preferred stocks, the type of equity Realty Income is acquiring, are hybrid securities, meaning they possess both equity and fixed income traits. Owners of preferred shares typically reap high dividend yields and are higher up on the corporate claims ladder than are common equity investors when issuers default — something that’s highly unlikely in the case of BREIT.
Blackstone Monetizing a Portion of CityCenter Stake
On the Las Vegas Strip, Blackstone and BREIT are well-known entities and previously haven’t been shy about realizing profits on investments in the US casino hub.
The private equity behemoth acquired the real estate of Aria and Vdara from MGM in 2021 for $3.89 billion. BREIT is also the majority owner of the Bellagio’s real estate as it paid $4.25 billion for 95% of that property in 2019.
Speaking of Bellagio, that was the first instance in which BREIT and Realty Income worked together on gaming real estate. The former sold the latter a 21.9% interest in the casino hotel $950 million in August 2023, valuing the iconic venue at $5.1 billion.
“We are pleased to reach this agreement and grow our partnership with Realty Income,” said Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate, in the press release. “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.”
Realty Income Expanding Its Casino Footprint
With its stake in the CityCenter land, Realty Income adds more gaming exposure to its portfolio. One of those holdings isn’t in Las Vegas, but it is tied to a highly visible operator.
In February 2022, Wynn Resorts (NASDAQ:WYNN) sold the real estate assets of Encore Boston Harbor to the REIT for $1.7 billion. The two sides entered into a 30-year lease agreement with initial annual rent of $100 million.
Realty Income also has three years left to potentially acquire 13 acres of land on the east side of Broadway in Everett, Mass. from Wynn, which would result in $20 million in rent credits being extended to the gaming company.
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