The Blackstone Bellagio deal values ​​the luxury hotel at $5 billion

The Blackstone Bellagio deal values ​​the luxury hotel at $5 billion

(Bloomberg) — Blackstone is selling a piece of the Bellagio Hotel in Las Vegas, a move that will bring money to investors in a $67 billion real estate fund for wealthy individuals.

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Real estate investor Realty Income Corporation buys a 21.9% stake in the hotel and casino properties in a deal that values ​​Bellagio’s assets at $5.1 billion. The fund behind it, the Blackstone Real Estate Income Trust, will hold a 73.1% stake.

Blackstone bought the Bellagio four years ago for $4.25 billion and has recently been considering offers for half its stake in the property.

Read more: Blackstone is said to be weighing Bellagio casino bids

Known as BREIT, the fund operates through redemption requests captured last year and has had limited withdrawals for nine consecutive months. Investors became more reluctant to hold cash in commercial real estate as the sector grappled with rising borrowing costs and declining real estate values.

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

Read more: BREIT redemption orders fall to lowest level this year

BREIT has sold $12 billion worth of real estate assets since the beginning of 2022, and generated $2.5 billion in profits during its ownership. Increased valuations of data centers have boosted recent returns.

The fund also has deals to sell an $800m hotel in Texas and a $2.2bn deal to offload its self-storage business. Last year, BREIT also sold its stakes in two Las Vegas hotels, the MGM Grand Las Vegas Resort and the Mandalay Bay Resort, generating profits and cash for BREIT investors.

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(Updates with additional details about BREIT in fourth paragraph)

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