In the formation of a new joint venture, Blackstone Real Estate Income Trust will sell a stake in the Bellagio Las Vegas resort and casino for $950 million to Realty Income Corp.
Realty Income, a real estate investment trust, will acquire common and preferred equity interest from BREIT in a joint venture that owns 95% interest in the Bellagio, according to a news release. The deal values the property at $5.1 billion.
Upon closing of the deal, Realty Income plans to invest about $300 million of common equity in the joint venture and acquire a 21.9% indirect interest in the property. BREIT will retain 73.1% indirect interest while MGM Resorts International, the operator of the Bellagio, will retain 5% interest.
Realty Income will also invest $650 million to acquire a yield-bearing preferred equity interest in the joint venture.
The deal is expected to close in the fourth quarter of this year, subject to customary closing conditions.
BREIT acquired the Bellagio, a resort with roughly 4,000 guestrooms and suites and casino with 157,000 square feet of gaming space and 200,000 gross square feet of meeting and event facilities, from MGM Resorts in a 2019 sale-leaseback deal valued at $4.25 billion. The triple net lease has about 26 years remaining.
The Bellagio deal is Realty Income’s second investment in the gaming industry. The company seeks to invest in high-quality real estate at scale and partner with operators who are leaders in their industries, Realty Income President and CEO Sumit Roy said in the news release.
The deal illustrates the strong investor demand for the high-quality assets within BREIT’s portfolio, said Nadeem Meghji, head of Blackstone Real Estate Americas.
“The Bellagio is an iconic property in the heart of the Las Vegas Strip, and we look forward to our continued ownership of this asset, now in partnership with Realty Income,” he said.