Blackstone agreed to sell an $800m preferred equity stake in the CityCenter Las Vegas complex to Realty Income, allowing the private equity firm to crystallise value from one of its flagship hospitality holdings while retaining full control of the property’s common equity.

Realty Income’s perpetual preferred investment covers the Aria Resort & Casino and the Vdara Hotel & Spa. The deal provides an initial annual return of 7.4%, stepping up after five years, and is structured to deliver an unlevered return of at least 8.3% when the preferred shares are redeemed. Realty Income will also hold a right of first offer on any future sale of Blackstone’s common equity in the asset.

Blackstone acquired the Aria and Vdara real estate for $3.89bn in 2021 and has since deepened its presence on the Las Vegas Strip. Its portfolio includes major interests in the Bellagio and the Cosmopolitan hotels. Realty Income, led by chief executive Sumit Roy, previously invested $950m in the Bellagio through a 2023 deal with Blackstone.

CityCenter comprises more than 5,500 rooms, extensive convention space, and high-end retail. The transaction is expected to close on 9 December.

Blackstone, which has long targeted hospitality and experiential real estate, continues to leverage preferred-equity structures to unlock liquidity without relinquishing ownership of core assets.

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