Realty Income Corp., an investment firm based in San Diego, has purchased a 21.9 percent ownership stake in the Bellagio from Blackstone Real Estate Americas for a total consideration of $950 million, in what the company is calling a prime investment opportunity.
MGM Resorts International will remain as the operator of the casino through its long-term $245 million annual lease with Blackstone. MGM first sold a 95 percent stake in Bellagio’s real estate to Blackstone for $4.25 billion in 2019, and still retains its 5 percent stake, even after the recent Realty Income deal.
Realty Income first moved into the gaming space last year when it acquired the real estate assets of Encore Boston Harbor from Wynn Resorts for $1.7 billion. In a similar lease-back scenario, Wynn also remains as the casino operator.
So, when the dust settles, the property’s ownership structure will look as follows: Blackstone- 73.1 percent; Realty Income- 21.9 percent; and MGM- 5 percent.
The deal is set to close by the end of the year and will not require any licensing proceedings given that the casino operations will not be affected.
“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,” Realty Income CEO Sumit Roy said in a statement.
“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,” said Nadeem Meghji, head of Blackstone’s real estate investment trust.
