Realty Income Announces $800 Million Preferred Equity Investment in CityCenter Las Vegas Real Estate Assets

Rhea-AI Summary

Realty Income (NYSE: O) will make an $800 million perpetual preferred equity investment in CityCenter real estate (ARIA Resort & Casino and Vdara), owned by Blackstone Real Estate, and expects the transaction to close on December 9, 2025 subject to customary conditions. Realty Income said the preferred carries an initial unlevered return of 7.4%, annual capped escalators beginning year five, and redemption protections including early redemption premiums and a make-whole to ensure an 8.325% unlevered IRR if redeemed. Realty Income also raised its 2025 investment volume outlook to over $6.0 billion and retains a right of first offer on future common equity sales.

The assets include approximately 5,500 rooms and 500,000 sq ft of convention space, operated by MGM Resorts.

Positive

• Perpetual preferred equity investment of $800 million
• Raised 2025 investment volume outlook to over $6.0 billion
• Initial unlevered return of 7.4%
• Make-whole protection to achieve 8.325% unlevered IRR on redemption
• Right of first offer on future common equity sale

Negative

• Realty Income receives no common equity ownership (Blackstone retains 100%)
• Preferred carries early redemption premiums and capped escalators complicating cash timing
• Transaction close subject to customary conditions (closing not guaranteed)

News Market Reaction – O

+0.12%

1 alert

+0.12% News Effect

On the day this news was published, O gained 0.12%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Preferred equity investment: $800 million 2025 investment guidance: Over $6.0 billion Initial return: 7.4% +5 more

8 metrics

Preferred equity investment $800 million Perpetual preferred equity in CityCenter real estate

2025 investment guidance Over $6.0 billion Updated 2025 investment volume outlook

Initial return 7.4% Initial unlevered rate of return on preferred equity

Target IRR 8.325% Unlevered IRR ensured via make-whole on redemption

Early redemption premium 1 3% Premium on redemptions before first anniversary

Early redemption premium 2 2% Premium on redemptions from first to fourth anniversary

Cash balance $417 million Outstanding cash as of Q3 2025 end

Unsettled forward equity $1.3 billion Unsettled forward equity as of announcement date

Market Reality Check

Price: $66.68 Vol: Volume 5,344,603 is below...

normal vol

$66.68 Last Close

Volume Volume 5,344,603 is below 20-day average of 6,124,286 (volume_relative 0.87). normal

Technical Price $57.22 is trading slightly below 200-day MA at $57.54 and 6.33% under the 52-week high.

Peers on Argus

Peers in REIT - Retail show small, mixed moves (e.g., SPG -0.25%, ADC -0.54%, RE...

Peers in REIT - Retail show small, mixed moves (e.g., SPG -0.25%, ADC -0.54%, REG +0.39%), suggesting this announcement was more stock-specific than a broad sector shift.

Historical Context

5 past events · Latest: Dec 09 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 09	Dividend increase	Positive	-0.7%	Monthly common-stock dividend raised slightly, marking 133rd increase.
Dec 01	Investment announcement	Positive	+0.1%	$800M perpetual preferred equity in CityCenter and higher 2025 investment outlook.
Nov 26	Governance update	Neutral	+0.7%	Orion (ONL) deemed Kawa’s director nomination notice invalid under bylaws.
Nov 19	Governance update	Neutral	-1.1%	Orion (ONL) confirmed receipt of director nominees from Kawa Capital.
Nov 18	Debt financing	Neutral	-1.1%	£900M unsecured term loan to refinance revolver and 2026 term loan tranche.

Pattern Detected

Recent Realty Income news around capital raising, investments, and dividends often saw modest price moves, with one notable divergence where a dividend increase coincided with a negative reaction.

Recent Company History

This announcement fits a series of capital allocation and financing moves by Realty Income. On Nov 18, 2025, the company closed a £900 million Sterling term loan to refinance existing borrowings. On Nov 7, 2025, it launched an at-the-market equity program for up to 150,000,000 shares. The current $800 million perpetual preferred equity investment in CityCenter and the increase in 2025 investment volume guidance to over $6.0 billion extend this expansion strategy into large-scale Las Vegas assets.

Market Pulse Summary

This announcement detailed Realty Income’s $800 million perpetual preferred equity investment in Cit...

Analysis

This announcement detailed Realty Income’s $800 million perpetual preferred equity investment in CityCenter’s ARIA and Vdara assets, targeting an initial 7.4% unlevered return with protections up to an 8.325% IRR on redemption. Management also raised 2025 investment volume guidance to over $6.0 billion, citing funding from cash, anticipated free cash flow, and $1.3 billion of unsettled forward equity. Investors may watch execution on closing by December 9, 2025 and subsequent deployment versus prior financing actions.

Key Terms

perpetual preferred equity, unlevered rate of return, IRR, right of first offer, +1 more

5 terms

perpetual preferred equity financial

"Realty Income will make an $800 million perpetual preferred equity investment..."

A perpetual preferred equity is a class of stock that pays a regular, usually fixed dividend and has no set date to return the investor’s principal, so it can pay income indefinitely much like a melt-freezing coupon attached to a share. It matters to investors because it offers steadier income and higher claim on a company’s cash than common shares, but with limited upside and sensitivity to interest rates and the issuer’s financial health.

unlevered rate of return financial

"expected to carry an initial unlevered rate of return to Realty Income of 7.4%..."

The unlevered rate of return is the profit percentage an investment would generate if it were bought entirely with cash, excluding any borrowing, interest costs, or tax effects. Investors use it to see the underlying performance of an asset on its own—like judging a car’s fuel efficiency without considering whether you financed the purchase—so they can compare projects or properties fairly regardless of how they are financed.

IRR financial

"if Realty Income has not received an 8.325% unlevered IRR on the redeemed amount..."

IRR (Internal Rate of Return) is the annualized percentage return an investment is expected to produce based on its projected series of cash outflows and inflows; mathematically, it’s the rate that makes the present value of those cash flows balance to zero. Investors use IRR to compare and rank projects or investments—similar to comparing the interest rates on savings accounts—to judge which offers the best return for the time and risk involved.

right of first offer financial

"Realty Income will retain a right of first offer on a future sale..."

A right of first offer is a contractual agreement that requires an owner to offer an asset or stake to a designated party before marketing it to others; the holder gets the first chance to negotiate terms directly with the seller. For investors, it matters because it can limit who can buy or set the sale price path—like getting the first invitation to buy a sought-after item before it goes on general sale, protecting potential access or controlling competition.

triple net lease financial

"The property is subject to an existing triple net lease with annual rent escalators..."

A triple net lease is a rental agreement where the tenant pays the base rent plus three main ongoing costs: property taxes, building insurance, and routine maintenance. For investors, this shifts much of the expense and risk onto the tenant, creating a steadier, more predictable income stream for the property owner—similar to renting a furnished home where the renter also pays the bills—making valuation and cash-flow forecasting simpler.

AI-generated analysis. Not financial advice.

Realty Income Increases 2025 Investment Volume Guidance to Over $6.0 Billion

SAN DIEGO and NEW YORK, Dec. 1, 2025 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^® and Blackstone Real Estate announced today a definitive agreement under which Realty Income will make an $800 million perpetual preferred equity investment in the real estate of CityCenter, comprised of the ARIA Resort & Casino and Vdara Hotel & Spa, which is owned by funds affiliated with Blackstone Real Estate. Blackstone Real Estate will retain 100% of the common equity ownership of the property, which will continue to be operated by MGM Resorts International. This represents Realty Income's second investment with Blackstone Real Estate, following the successful Bellagio Las Vegas joint venture completed in 2023.

In conjunction with today's announcement, Realty Income is increasing its 2025 investment volume outlook to over $6.0 billion.

The perpetual preferred equity investment is expected to carry an initial unlevered rate of return to Realty Income of 7.4% with annual, capped escalators starting on the fifth anniversary of the closing. The preferred equity investment is subject to an early redemption premium payable to Realty Income of 3% of the preferred equity amount if redeemed prior to the first anniversary of closing, or 2% of the preferred equity amount if redeemed after the first anniversary but before the fourth anniversary of closing. Upon redemption of the preferred equity amount, if Realty Income has not received an 8.325% unlevered IRR on the redeemed amount, it will receive a make-whole payment to ensure that such return is achieved. Realty Income will retain a right of first offer on a future sale of the common equity interests in the real estate by Blackstone Real Estate.

"We are pleased to build on our strategic relationship with Blackstone Real Estate to invest in one of the Las Vegas Strip's iconic properties," said Sumit Roy, Realty Income's President and Chief Executive Officer. "This represents an immediately accretive investment for Realty Income with a favorable initial yield and IRR profile, further demonstrating the value of our size, scale, and diversification. This transaction adds to an active fourth quarter investment pipeline, which is fully funded from an equity standpoint from a combination of cash, anticipated free cash flow and equity, of which Realty Income had approximately $417 million of outstanding cash as of the end of the third quarter and approximately $1.3 billion of unsettled forward equity as of today."  

Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, said: "We are pleased to reach this agreement and grow our partnership with Realty Income. This preferred equity investment is a terrific outcome for our investors as it returns significant capital while preserving our ownership in a world-class resort at the heart of the Las Vegas Strip."

The property is subject to an existing triple net lease with annual rent escalators and approximately 26 years of remaining initial term, plus three 10-year extension options. In-place rent is significantly well-covered through existing property cash flows.

Located at the center of the Las Vegas Strip, the ARIA Resort & Casino and Vdara Hotel & Spa include gaming, lodging, luxury retail and upscale dining space, with approximately 5,500 rooms and 500,000 square feet of convention space operated and maintained by MGM Resorts International.  

This transaction is expected to close on December 9^th, 2025, subject to customary closing conditions.

J.P. Morgan, Citi, Deutsche Bank, Goldman Sachs, and Evercore are acting as financial advisors to Blackstone. Simpson Thacher & Bartlett LLP is acting as legal counsel to Blackstone. Latham & Watkins LLP is acting as legal counsel to Realty Income.

About Realty Income
Realty Income (NYSE: O), an S&P 500 company, is real estate partner to the world's leading companies^®. Founded in 1969, we serve our clients as a full-service real estate capital provider. As of September 30, 2025, we have a portfolio of over 15,500 properties in all 50 U.S. states, the U.K., and seven other countries in Europe. We are known as "The Monthly Dividend Company^®" and have a mission to invest in people and places to deliver dependable monthly dividends that increase over time. Since our founding, we have declared 665 consecutive monthly dividends and are a member of the S&P 500 Dividend Aristocrats^® index for having increased our dividend for over 30 consecutive years. Additional information about the company can be found at www.realtyincome.com.

About Blackstone Real Estate
Blackstone is a global leader in real estate investing. Blackstone's real estate business was founded in 1991 and has US $320 billion of investor capital under management. Blackstone is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, data centers, residential, office and hospitality. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world. Blackstone's Core+ business invests in substantially stabilized real estate assets globally, through both institutional strategies and strategies tailored for income-focused individual investors including Blackstone Real Estate Income Trust, Inc. (BREIT). Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT). 

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include the anticipated closing of the preferred investment; and the timing thereof, anticipated future performance, discussions of our business and portfolio including management thereof; our platform including our international expansion; growth strategies; sources of capital; our investment pipeline and intentions to acquire or dispose of properties (including geographies and partners). Forward-looking statements are subject to risks, uncertainties, and assumptions about us, which may cause our actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, our ability to consummate the transaction on the contemplated timeline, if at all; the future operational performance of the tenant and the properties, our continued qualification as a real estate investment trust; general domestic and foreign business, economic, or financial conditions; competition; fluctuating interest and currency rates; inflation and its impact on our clients and us; access to debt and equity capital markets and other sources of funding (including the terms and partners of such funding); volatility and uncertainty in the credit and financial markets; other risks inherent in the real estate business including our clients' solvency, client defaults under leases, increased client bankruptcies, potential liability relating to environmental matters, illiquidity of real estate investments (including rights of first refusal or rights of first offer), and potential damages from natural disasters; impairments in the value of our real estate assets; volatility and changes in domestic and foreign laws and the application, enforcement or interpretation thereof (including with respect to tax laws and rates); property ownership through co-investment ventures, funds, joint ventures, partnerships and other arrangements which, among other things, may transfer or limit our control of the underlying investments; epidemics or pandemics; the loss of key personnel; the outcome of any legal proceedings to which we are a party or which may occur in the future; acts of terrorism and war; the anticipated benefits from mergers, acquisitions, co-investment ventures, funds, joint ventures, partnerships, and other arrangements; and those additional risks and factors discussed in our reports filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Past operating results and performance are provided for informational purposes and are not a guarantee of future results. There can be no assurance that historical trends will continue. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release and forecasts made in the forward-looking statements discussed in this press release may not materialize. We do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.

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SOURCE Realty Income Corporation

FAQ

What is Realty Income's investment in CityCenter Las Vegas (O)?

Realty Income will invest $800 million as perpetual preferred equity in CityCenter (ARIA and Vdara).

When is the CityCenter preferred equity investment expected to close for O?

The transaction is expected to close on December 9, 2025, subject to customary closing conditions.

How does the preferred equity pay Realty Income (NYSE: O)?

The preferred carries an initial unlevered return of 7.4% with annual capped escalators starting year five.

What protections does Realty Income have if the preferred is redeemed?

Early redemption premiums apply (3% before year one; 2% between years one and four) and a make-whole ensures an 8.325% unlevered IRR if not met.

How does the CityCenter deal affect Realty Income's 2025 investment guidance (O)?

Realty Income increased its 2025 investment volume outlook to over $6.0 billion in conjunction with this transaction.

Will Realty Income own the CityCenter common equity after the deal (O)?

No; Blackstone Real Estate will retain 100% of the common equity ownership, while Realty Income holds preferred equity.