Realty Income Corporation, the real estate investment trust (REIT) famously branded as “The Monthly Dividend Company,” is poised to finalize a substantial strategic move. On December 9, 2025, the company will commit $800 million to acquire a preferred equity interest in the CityCenter complex on the Las Vegas Strip. This transaction will elevate the REIT’s total investment volume for 2025 to more than $6 billion, underscoring a continued aggressive growth strategy executed in partnership with Blackstone Real Estate.
Strategic Details and Financial Terms
This investment targets the underlying real estate assets of CityCenter, a premier destination featuring the luxury ARIA and Vdara resorts. The operational structure sees Blackstone retaining 100% ownership of the common equity, while MGM Resorts International continues to manage all operations.
The deal is structured to provide Realty Income with several key financial advantages:
* An unlevered initial yield of 7.4%
* Contractual annual escalations commencing in the fifth year
* Protection to an 8.325% internal rate of return (IRR) via make-whole provisions
* A right of first offer on any future sale of Blackstone’s stake
The property itself encompasses approximately 5,500 hotel rooms and 500,000 square feet of conference space. The investment is secured by a triple-net lease with a remaining term of about 26 years, which includes three separate 10-year extension options.
Revised Guidance and Funding
In light of this agreement, Realty Income’s management has raised its full-year 2025 investment guidance. The forecast has been increased by 9%, from $5.5 billion to over $6.0 billion. CEO Sumit Roy highlighted the strategic importance of the relationship with Blackstone and pointed to the immediate accretion the deal is expected to deliver.
Should investors sell immediately? Or is it worth buying Realty Income?
The company plans to fund the transaction using existing cash on hand, totaling roughly $417 million, alongside approximately $1.3 billion from unsettled forward equity offerings. Despite the increased investment activity, Realty Income has reaffirmed its 2025 guidance for adjusted funds from operations (AFFO), which remains in a range of $4.25 to $4.27 per share.
Market Reaction and Analyst Sentiment
Wall Street’s response to the news has been measured. The current analyst consensus rating stands at “Hold,” with an average price target of $62.23. Recent adjustments include Barclays raising its target to $64, while UBS maintains the most optimistic view with a $66 target.
The company’s shares are currently trading near their 200-day moving average but have remained below the 50-day line since late October. With a market capitalization of $53.5 billion and a dividend yield of approximately 5.6%, Realty Income continues to be a core holding for income-focused investors. The firm distributed its 665th consecutive monthly dividend payment in November.
The formal closing of the CityCenter transaction on December 9 will be a key test of investor appetite for the REIT’s ongoing diversification into the gaming and hospitality sectors. The market will gain further insight when Realty Income reports its fourth-quarter 2025 results, scheduled for early February 2026.
Ad
Realty Income Stock: Buy or Sell?! New Realty Income Analysis from December 5 delivers the answer:
The latest Realty Income figures speak for themselves: Urgent action needed for Realty Income investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from December 5.
Realty Income: Buy or sell? Read more here...
