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Blackstone inked a deal to sell its 22% stake in the Bellagio for $300M to Realty Income, which values the Las Vegas asset at $5.1B.
The investment giant's private REIT, Blackstone Real Estate Income Trust, acquired its interest in the Bellagio in 2019 from MGM Resorts in a sale-leaseback transaction that valued the property at $4.25B. MGM still manages the property under a long-term contract.
In July, BREIT received $3.7B of redemption requests and paid out $1.3B, or 34% of them, the ninth month in a row it has limited redemptions. In the face of investors demanding redemptions, and BREIT capping them, the private REIT has sold several assets in recent months.
Most recently, BREIT struck a deal in July to sell Simply Self Storage to Public Storage for $2.2B, and it is looking to sell Three Ravinia Drive in Atlanta, an office building it acquired last year as part of its $5.8B acquisition of Preferred Apartment Communities.
Blackstone has long been an investor in Las Vegas properties, buying the Cosmopolitan hotel and casino for $1.73B in 2014, and eventually selling it for $5.65B, making it the most profitable single-asset real estate deal in the firm’s history.
In 2020, Blackstone bought 50% of the MGM Grand and Mandalay Bay hotels in a deal that valued the hotels at $4.6B, and last year it sold the stake to VICI in a deal that valued the assets at $5.5B.
The Bellagio deal points to a strong recovery for the entertainment mecca since the worst of the pandemic. The early phase of the pandemic cost the Las Vegas economy $34B, with the number of visitors crashing in the spring of 2020.
More recently, the region has recovered as visitors started returning in earnest. In 2022, some 38.8 million visitors came to Las Vegas, a recovery from the 32.2 million total in 2021 and about 19 million in 2020, though still below the 42.5 million visitors who came in 2019, according to the Las Vegas Convention and Visitors Authority.
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