Blackstone Selling Bellagio Stake to Realty Income for $950M
Blackstone’s (NYSE: BX) Blackstone Real Estate Income Trust (BREIT) is merchandising 21.9% of its interest in the real land of Bellagio on the Las Vegas Strip to Realty Income (NYSE: O) for close to $950 million, valuing the iconic locale at $5.1 billion.
That’s comfortably to a higher place the $4.25 1000000000 BREIT paid for 95% of the tangible demesne of Bellagio in 2019. Friday’s declaration ends several months of speculation regarding BREIT’s plans for the property. Dating endorse to endure year, the real land investment funds vehicle has been collide with with investor redemptions, forcing it to liquidate some holdings. Those departures stoked twaddle that a trade involving Bellagio could live afoot.
Upon closing, Realty Income testament vest around $300 one thousand thousand of vernacular equity in the articulation venture, depicted object to certain adjustments, to gain a 21.9% indirect interest in the property, BREIT will keep back a 73.1% indirect interest,” according to a statement. “Realty Income will also clothe $650 meg to gain a yield-bearing preferred equity interest inward the reefer venture.”
The dealing is slated to closely inwards the 4th quarter. MGM Resorts International (NYSE: MGM), the manipulator of Bellagio, testament maintain a 5% interest inwards the tangible estate.
Las Vegas Strip Has Been Good to Blackstone
The damage Realty Income is paying for its interestingness inward Bellagio’s holding assets implies the locus is worth 20% to a greater extent today than what BREIT paid for it inwards 2019.
Add that to the name of Blackstone’s success stories on the Las Vegas Strip. Last December, the buck private equity solid sold its 49.9% interests inwards Mandalay Bay and MGM Grand to VICI Properties (NYSE: VICI) for $4.27 billion.
In September 2021, Blackstone proclaimed the sale of Cosmopolitan for $5.65 billion meaning it nearly tripled its investment on the Strip locale septet years after getting it. MGM paid $1.6 one million million for the operating rights of that cassino hotel patch a syndicate consisting of the Cherng Family Trust, Stonepeak Partners, and Blackstone Real Estate Income Trust (BREIT) paid approximately $4 1000000000 for the belongings assets.
Cosmopolitan had antecedently been mentioned as a possible sale prospect for BREIT. Blackstone also owns the dimension assets of Aria and Vdara, both of which are also operated past MGM.
Another Gaming Deal for Realty Income
When it comes to cassino real estate, the primary feather players among listed existent land investment trusts (REITs) are VICI and Gaming and Leisure Properties (NASDAQ: GLPI). However, Bellagio isn’t Realty Income’s number 1 displace into the space.
In February 2022, the REIT announced the $1.7 one thousand million purchase of the tangible demesne of Wynn Resorts (NASDAQ: WYNN) Encore Boston Harbor. The two sides experience a 30-year engage arrangement for that locus with an choice for another 30 years at the death of the initial term.
“The existing Bellagio treble meshwork lease bodily structure with MGM includes 2.0% yearbook hire escalators for the next half a dozen years, the greater of 2.0% or Consumer Price Index (CPI) (capped at 3.0%) in years 7-16, and the greater of 2.0% or CPI (capped at 4.0%) in years 17-26,” according to the statement. “Realty Income’s vernacular equity ownership involvement will be subsidiary to its $650 1000000 preferred equity investiture in the venture.”
The venue has property-level debt of $3 billion.