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Blackstone sells minority stake in Bellagio

Realty Income investing $950M, Las Vegas property valued at $5.1B

Blackstone Sells Minority Stake in Bellagio
Blackstone's Stephen Schwarzman; 3600 South Las Vegas Boulevard in Las Vegas; Realty Income's Sumit Roy (Getty, Realty Income)

The Blackstone Group is selling again in Las Vegas, though this time it’s gambling on keeping a majority stake in its property.

Realty Income purchased a 22 percent stake in the Bellagio casino and resort in Nevada, the Wall Street Journal reported. Blackstone, which owns the property through the Blackstone Real Estate Income Trust fund, is maintaining its position as majority stakeholder with a 73 percent interest; MGM Resorts International has the remaining interest and operates the property under a long-term lease.

Led by Sumit Roy, Realty Income owns more than 13,000 properties in the United States and Europe. While it paid $300 million for the minority stake, it also agreed to invest a $650 million preferred equity stake.

The $950 million overall helps to value the landmark property at $5.1 billion. The deal is expected to close during the fourth quarter.

Blackstone hasn’t owned the property for long, having purchased it from MGM Resorts in a sale-leaseback transition in 2019, which valued the Bellagio at $4.25 billion. MGM’s rent at the casino will keep increasing over the life of the 30-year term.

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Blackstone has taken on the mindset of a seller in Las Vegas as the city’s essential tourism industry rebounds. Two years ago, Blackstone agreed to sell The Cosmopolitan of Las Vegas for $5.6 billion, netting a $4.1 billion profit. That sale was split between casino operations (purchased by MGM for $1.6 billion) and the real estate assets, split between BREIT, Stonepeak Partners and the Cherng Family Trust for $4 billion.

Blackstone’s real estate investment trust has been under some pressure as investors flocked to withdraw funds last year. Redemption requests have slowed, however, and BREIT has $10 billion in liquidity.

— Holden Walter-Warner

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Blackstone GroupCasinosLas VegasRealty IncomeResorts