Realty Income Expands Vegas Portfolio with Major CityCenter Stake

In a significant strategic move, Realty Income Corporation has committed $800 million to acquire a substantial preferred equity interest in the iconic CityCenter complex on the Las Vegas Strip. The transaction focuses on the real estate assets of the Aria Resort & Casino and the Vdara Hotel & Spa, marking another high-profile investment for the real estate investment trust (REIT) in the gaming and hospitality sector.

Strategic Partnership and Transaction Structure

The agreement, signed with Blackstone Real Estate, sees Realty Income providing $800 million in preferred equity financing to the CityCenter joint venture. Under this structure, Blackstone retains 100% ownership of the common equity, while MGM Resorts International continues to operate both properties under a long-term triple-net lease agreement. This model allows Realty Income to participate in a premier asset without taking on operational responsibilities.

The financial terms are structured to deliver immediate and protected returns. The initial unlevered yield is set at 7.4%. Furthermore, the lease includes contractual annual rent escalations commencing in the fifth year, providing a built-in hedge against inflation. A make-whole provision ensures a minimum internal rate of return (IRR) of 8.325% should an early exit occur.

Key Transaction Details:

Should investors sell immediately? Or is it worth buying Realty Income?

• Investment Amount: $800 million
• Initial Unlevered Yield: 7.4%
• Minimum Guaranteed IRR: 8.325%
• Expected Closing Date: December 9, 2025
• Additional Right: Realty Income holds a right of first offer on any future sale of the assets.

Revised Investment Outlook for 2025

Directly resulting from this deal, Realty Income has raised its investment guidance for 2025 to over $6.0 billion. This upward revision underscores the company’s capacity to deploy capital from a position of strength. As of the end of the third quarter of 2025, the REIT had significant liquidity available, including approximately $417 million in cash and $1.3 billion from forward equity agreements, facilitating an aggressive acquisition strategy.

Deepening Ties on the Las Vegas Strip

This investment represents the second major collaboration between Realty Income and Blackstone in Las Vegas, following a joint venture on the Bellagio in 2023. The latest move solidifies Realty Income’s growing footprint along the Strip, adhering to its core strategy of acquiring mission-critical, high-quality real estate occupied by creditworthy tenants.

The transaction delivers an immediate accretive yield while the embedded rent growth offers long-term protection. With the closing scheduled for next week, the deal is poised to positively impact the company’s financial results for 2025.