MGM’s CityCenter gets huge investment from Realty Income Corporation
Deal follows similar investment in The Bellagio
MGM’s Las Vegas resort CityCenter, which includes Aria casino and Vdara hotel, is getting an $800m investment from Realty Income Corporation, a monthly dividend company.
Reality and Blackstone Real Estate have signed a definitive agreement under which Realty Income will make an $800m perpetual preferred equity investment in the real estate of CityCenter, comprised of the ARIA Resort & Casino and Vdara Hotel & Spa, which is owned by funds affiliated with Blackstone Real Estate. Blackstone Real Estate will retain 100 per cent of the common equity ownership of the property, which will continue to be operated by MGM Resorts International. This represents Realty Income’s second investment with Blackstone Real Estate, following the successful Bellagio Las Vegas joint venture completed in 2023.
In conjunction with the announcement, Realty Income is increasing its 2025 investment volume outlook to over $6bn.
“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,” said Sumit Roy, Realty Income’s President and Chief Executive Officer. “This represents an immediately accretive investment for Realty Income with a favorable initial yield and IRR profile, further demonstrating the value of our size, scale, and diversification. This transaction adds to an active fourth quarter investment pipeline, which is fully funded from an equity standpoint from a combination of cash, anticipated free cash flow and equity, of which Realty Income had approximately $417 million of outstanding cash as of the end of the third quarter and approximately $1.3 billion of unsettled forward equity as of today.”
Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, said: “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.”
The property is subject to an existing triple net lease with annual rent escalators and approximately 26 years of remaining initial term, plus three 10-year extension options. In-place rent is significantly well-covered through existing property cash flows.
Located at the center of the Las Vegas Strip, the ARIA Resort & Casino and Vdara Hotel & Spa include gaming, lodging, luxury retail and upscale dining space, with approximately 5,500 rooms and 500,000 square feet of convention space operated and maintained by MGM Resorts International.
