Published on: December 1, 2025, 04:26h.
Updated on: December 1, 2025, 04:26h.
- In 2021, a private equity firm took over CityCenter’s real estate.
- The REIT is set to acquire a preferred equity stake.
- This marks Realty Income’s third casino investment and its second collaboration with Blackstone.
Today, Blackstone’s (NYSE: BX) Blackstone Real Estate Income Trust (BREIT) and Realty Income (NYSE: O) have announced that Realty Income will be making an $800 million investment in a “perpetual preferred equity interest” in the real estate of CityCenter Las Vegas.
The CityCenter development features the ARIA Resort & Casino and Vdara Hotel & Spa, both operated by MGM Resorts International (NYSE: MGM). There will be no impact on the operations of these establishments due to the Blackstone/Realty Income transaction. The private equity firm retains complete ownership of the common equity related to CityCenter through its BREIT division.
According to a statement, “The perpetual preferred equity investment is projected to deliver an initial unleveraged return rate of 7.4% to Realty Income, with capped annual increases commencing on the fifth anniversary of closing.” Furthermore, “an early redemption premium of 3% applies if the preferred equity is redeemed within the first year, and 2% applies if redeemed during the second or third year after the closure.”
Preferred stocks, like the equity Realty Income is acquiring, are hybrid financial instruments, accommodating both equity and fixed income characteristics. Investors in preferred shares often enjoy substantial dividend yields and have priority over common stockholders in the event of default — which is highly improbable with BREIT.
Blackstone Liquidating a Portion of CityCenter Investment
On the Las Vegas Strip, Blackstone and BREIT are recognized players, known for capitalizing on their investments in the thriving casino sector.
In 2021, the private equity giant acquired the properties of Aria and Vdara from MGM for $3.89 billion. Additionally, BREIT holds the majority interest in the Bellagio’s property, having invested $4.25 billion for a 95% stake in 2019.
Notably, the Bellagio transaction marked the initial collaboration between BREIT and Realty Income in the casino real estate market. In August 2023, Breilt sold Realty Income a 21.9% stake in the casino hotel for $950 million, valuing the renowned venue at $5.1 billion.
Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate, expressed, “We are excited to finalize this agreement and enhance our partnership with Realty Income. This preferred equity investment represents a significant return of capital for our investors while allowing us to maintain ownership of a premier resort on the iconic Las Vegas Strip.”
Realty Income Broaden Its Casino Portfolio
With its investment in the CityCenter land, Realty Income enhances its exposure in the gaming market. Notably, one of its holdings extends beyond Las Vegas but is associated with a well-known operator.
In February 2022, Wynn Resorts (NASDAQ:WYNN) offloaded the real estate assets of Encore Boston Harbor to the REIT for $1.7 billion, establishing a 30-year lease agreement with an initial annual rent of $100 million.
Furthermore, Realty Income has three years left to possibly acquire 13 acres of land on the east side of Broadway in Everett, Massachusetts from Wynn, which would offer $20 million in rent credits to the gaming entity.