Dec 1 (Reuters) - Realty Income said on Monday it would make an $800 million perpetual preferred equity investment in Las Vegas' CityCenter assets comprising ARIA Resort & Casino and Vdara Hotel & Spa, which are owned by funds affiliated with Blackstone Real Estate.
Blackstone Real Estate will retain 100% 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 $950 million investment in Bellagio Las Vegas in 2023.
Realty Income will retain a right of first offer on a future sale of the common equity interests in the real estate by Blackstone Real Estate.
"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 Realty Income CEO Sumit Roy.
Realty Income also said it is increasing its 2025 investment volume outlook to over $6.0 billion.
The ARIA Resort & Casino and Vdara Hotel & Spa are located at the center of the Las Vegas Strip, with about 5,500 rooms and 500,000 square feet of convention space operated and maintained by MGM Resorts International.
The investment will yield an initial 7.4% return, with increases starting in year five. The deal will also deliver Realty Income an 8.3% return, on the redemption of the preferred equity amount.
The transaction is expected to close on December 9.
(Reporting by Parth Chandna; Editing by Maju Samuel)
