Realty Income Invests $950M In Bellagio Las Vegas

The Las Vegas Strip, a glitzy oasis located in the middle of the Nevada desert, is synonymous with some of the most iconic casinos, luxurious resorts, and infinite entertainment. Among the popular landmarks that adorn the fabled boulevard, the Bellagio Las Vegas stands as an enduring symbol of sophistication and opulence.

The Bellagio is one of those landmarks that certainly needs no introduction. Nestled smack in the middle of the Vegas Strip, the luxurious establishment boasts an array of attractions and features that have captivated gamblers and tourists from all corners of the world for decades. As a recipient of numerous industry accolades, the Bellagio consistently ranks among the globe’s most prestigious resorts.

With roughly 4,000 exquisitely appointed guestrooms and suites spread across 2 massive structures, the Bellagio offers its clients the epitome of elegance and comfort. The resort also boasts a huge gaming area encompassing 157,000 square feet where gamblers from all over the country assemble to try out their luck.

To cater to those looking for refined event and meeting facilities, the Bellagio doesn’t disappoint. Covering a staggering 200,000 gross square feet, the state-of-the-art event and conferencing facilities are ideal for corporate gatherings, special occasions, as well as conventions.

For decades, the hallmark of the Bellagio has been the awe-inspiring Fountains of Bellagio. These choreographed waterfalls have become a must-see spectacle for visitors arriving in Vegas by their masses. Plus, it should be noted that the Bellagio also houses several Michelin-starred restaurants that deliver a culinary experience rooted in excellence.

Enter Realty Income’s strategic vision

Just recently, the Bellagio announced that it had welcomed a new investor into its illustrious fold, marking a considerable milestone in the real estate and entertainment sector. Realty Income Corporation, in partnership with Blackstone Real Estate Income Trust (BREIT), has unveiled a groundbreaking agreement to acquire a massive stake in the Bellagio, adding to its already impressive portfolio of high-end real estate assets.

Realty Income Corporation, commonly referred to as the Monthly Dividend Company has entered into a definitive agreement to invest close to $950 million in iconic Bellagio. This considerable investment consists of both common, as well as preferred equity interests in a new joint venture established by BREIT, which will collectively control an impressive 95 stake in the real estate assets of the iconic resort.

Once this landmark transaction has been completed, Realty Income will effectively inject approximately $300 million in common equity into the joint venture, successfully securing a 21.9% indirect interest in the Bellagio. At the same time, BREIT will retain the majority share with a 73.1% indirect interest, while MGM Resorts International will continue to maintain a hold of 5.0% interest in Bellagio.

This strategic partnership brings together some of the most recognized real estate giants and industry-leading casino operators, promising a bright future for the Bellagio in Vegas. MGM Resorts announced that it was offloading 2 of its well-known casinos in Las Vegas in 2019 and since then MGM has maintained 5% equity in Bellagio where the company has been paying approximately $245 million in yearly rent to operate the property.

Plus, Realty Income is expected to extend its investment by an extra $650 million to acquire a yield-bearing preferred equity interest in the joint venture. This multi-tiered investment approach underscores Realty Income’s commitment to securing a considerable presence in one of the Vegas Strip’s most visited destinations.

Realty Income Corporation has developed a reputation for investing in quality real estate assets, focusing on large-scale partnerships with industry-leading operators. The acquisition of a considerable stake in the Bellagio aligns perfectly with Realty Income’s strategy vision.

According to the President and Chief Executive Officer of Realty Income, the acquisition is an important transaction for the company as it represents Realty’s second investment in the expanding gambling sector. This strategic deal truly exemplified Realty Income’s size, scale, as well as access to capital.

Meanwhile, the Vegas Strip continues to shine bright in terms of revenue

Nevada, also referred to as the betting capital of the world, continues to make waves in the gambling sector. The Silver State reportedly registered an astounding achievement in July, reporting a record-breaking monthly gaming win for the state. With a combined betting revenue of approximately $1.4 billion, the state has set a new benchmark in the realm of gambling.

This monumental accomplishment is all the more amazing considering the number of operating casinos on the Strip that decreased during the same period. In July last year, Nevada boasted 453 casinos. However, by July this year, the number had reduced to 439. Yet, despite the reduction in the volume of casinos, Nevada still managed to attain a remarkable 6.69% boost in revenue compared to 2022’s earnings of $1.3 billion.

While the entire state no doubt contributed to the historic achievement, the Strip played a pivotal role. The Strip’s 60 licensees alone accounted for a staggering $834.9 million of the $1.2 billion that Clark County casinos collectively generated from customers during July.

What is especially noteworthy is that this increase of 6.69% highlights the resilience and allure of the gambling industry in Nevada, even in the wake of challenges. In particular, slot machines and baccarat tables played a big role in propelling the state to its record-breaking status. 

The robust revenue also translates to state collections. Based on records, the state collected approximately $95.7 million in percentage fees. This amount reflects an increase of 5.94% or the equivalent of 5.37 million compared to 2022’s figures. While the Strip has been leading the charge with record-breaking performances, other regions within Clark County have also made major contributions.

Downtown, often regarded as the historical heart of Vegas, also reported revenues worth $65.37 million, which represents a boost of 9% compared to last year’s earnings of $60 million in July 2022. 

Final Thoughts

Nevada’s gambling wins have been more than just financial milestones- they stand as a testament to the enduring appeal of this iconic gaming destination. As Realty Income invests in the Bellagio, it does so with optimism, building on the state’s impressive monthly gaming wins that have so far exceeded $1 billion each month.

Caesars to open a new $375 million conference center this upcoming in March 2020