Realty Income to invest $950m in Bellagio Las Vegas joint venture

August 25, 2023
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The definitive agreement will allow the companies to acquire 95% of Bellagio real estate assets.

Realty Income Corporation, The Monthly Dividend Company and Blackstone Real Estate Income Trust (BREIT), have signed a definitive deal for a new joint venture involving real estate assets in The Bellagio Las Vegas. The companies have agreed to invest $950m to acquire 95% of both common and preferred equity interests in the property.

Realty Income will invest close to $300m of common equity in the joint venture upon closing. The company will acquire a yield-bearing preferred equity interest in the joint venture via an additional $650m investment.

Its financial commitment is subject to certain adjustments.

Company President and CEO Sumit Roy commented, "Realty Income seeks to invest in high-quality real estate at scale in partnership with operators who are leaders in their respective industries. This transaction to acquire an interest in the Bellagio, an iconic property, represents our second investment in the gaming industry and exemplifies the advantages of our size, scale and access to capital.

"We are pleased to initiate our Credit Investment platform through a preferred equity investment in the Bellagio joint venture. Credit Investments are a natural adjacency to our traditional business, allowing us to provide additional value to our clients while leveraging our core competencies in transaction sourcing and structuring, and real estate and credit underwriting and monitoring."

Under the terms of the deal, BREIT and MGM Resorts International will retain 73.1% indirect interest and 5% interest respectively.

"Where you invest matters, and this transaction demonstrates the strong investor demand for the high-quality assets we have assembled within BREIT,” 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. This partial sale represents another terrific outcome for BREIT shareholders."

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