Blackstone’s Bellagio Deal Values Luxury Hotel at $5 Billion

(Bloomberg) — Blackstone Inc. is selling a piece of the Las Vegas hotel Bellagio, a move that will generate cash for investors in a $67 billion property fund for wealthy individuals.

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Property investor Realty Income Corporation is buying a 21.9% stake in the hotel’s and casino’s real estate in a deal valuing the Bellagio’s assets at $5.1 billion. The fund behind it, the Blackstone Real Estate Income Trust, will retain 73.1%.

Blackstone bought the Bellagio four years ago for $4.25 billion and has recently been weighing offers for half of its interest in the real estate of the hotel.

Read More: Blackstone Is Said to Weigh Offers for Stake in Bellagio Casino

The fund known as BREIT has been working through redemption requests that picked up last year and has limited withdrawals for nine straight months. Investors became more hesitant to lock up cash in commercial property while the sector was grappling with higher borrowing costs and falling property values.

Redemptions have been easing, and July was the lowest month for requests this year. The fund had about $10 billion in liquidity at the beginning of August.

Read More: BREIT’s Redemption Requests Decline to Lowest Point This Year

BREIT has sold $12 billion of real estate assets since the beginning of 2022, generating $2.5 billion of profit during its ownership. The rising valuations of data centers have buoyed recent returns.

The fund has also struck deals for the $800 million sale of a Texas hotel, and a $2.2 billion deal to offload a self-storage business. In the past year, BREIT also sold its stake in two Las Vegas hotels, the MGM Grand Las Vegas and Mandalay Bay resort, netting profits and cash for BREIT investors.

(Updates with additional detail on BREIT in fourth paragraph)

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