Blackstone Contemplating Selling Half of its Bellagio Real Estate Stake

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Blackstone Inc is reportedly considering selling half of its stake in the real estate of the Bellagio hotel and casino resort in Las Vegas.

The giant New York-based investment firm purchased the Bellagio property almost four years ago for $4.25 billion, only to lease it back to operator MGM Resorts International for operation.

While Blackstone is weighing its options, it has not yet committed to a sale, according to insiders who spoke to Bloomberg news. The sources wished to remain anonymous.

Las Vegas Real Estate Ventures

Blackstone has been exploring ways to cash out on some of its real estate positions for a while. We last reported on rumors the Bellagio might be soon up for sale back in April of this year.

The Bellagio, one of the top-performing resorts on the Las Vegas Strip, continues to be operated under a long-term lease by MGM Resorts.

It has been open on the Strip since 1998 and is one of Sin City’s most iconic venues. Aside from its legendary fountains, which are one of the most Instagrammed spots in the world, the Bellagio also has a its own fine art gallery, a botanical garden, and 155,000 square feet of casino gaming space.

Meanwhile, owners Blackstone have a history making big profits off the back of famous Las Vegas casino resorts.

It sold the legendary Cosmopolitan to MGM in 2021 for $5.65 billion, which was one the biggest real estate transactions in US history.

The investment firm also recently announced plans to sell some $3.1 billion in warehouses and industrial property assets to Prologis Inc.

Potential Buyers and Market Conditions

While the potential sale of a stake in the Bellagio’s real estate is likely to attract interest, it remains unclear who the potential buyers might be.

The real estate market, particularly for commercial properties, has been facing a lot of challenges over the past year.

And Las Vegas’ strip casinos are facing slight declines in revenues, even if Nevada’s gaming industry more widely is booming.

“Commercial real estate assets are facing multiple challenges against the backdrop of higher interest rates and reduced appetite for bank lending into the space,” said a recent report by worldwide leading accountancy firm PricewaterhouseCoopers, or PwC.

“Anticipated environmental, social, governance (ESG) reporting requirements are impacting real estate development, operations and associated services, as companies seek to right-size their real estate footprint and reach carbon neutral goals.”

One suitor who isn’t worried about downsizing its portfolio is VICI Properties. The Caesars Entertainment spin-off real estate investment firm is the Las Vegas Strip’s biggest landlord already.

It has also previously worked with Blackstone in Las Vegas. VICI paid $1.27 billion to complete its purchase of the MGM Grand and the Mandalay Bay resorts from Blackstone in 2022.

As Blackstone weighs its options, the future of the Bellagio’s real estate remains to be seen. However, the potential sale underscores the firm’s ongoing strategy to capitalize on its real estate investments in Las Vegas and beyond.

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