REALTY INCOME ANNOUNCES $950 MILLION INVESTMENT IN BELLAGIO LAS VEGAS AT $5.1 BILLION VALUATION

NEW YORK and SAN DIEGO, Aug. 25, 2023 /PRNewswire/ -- Realty Income Corporation (Realty Income, NYSE: O), The Monthly Dividend Company^®, and Blackstone Real Estate Income Trust, Inc. ("BREIT") jointly announced today that Realty Income has signed a definitive agreement to invest approximately $950 million to acquire common and preferred equity interests from BREIT in a new joint venture that owns a 95% interest in the real estate assets of The Bellagio Las Vegas. Upon closing, Realty Income will invest approximately $300 million of common equity in the joint venture, subject to certain adjustments, to acquire a 21.9% indirect interest in the property, BREIT will retain a 73.1% indirect interest, and MGM Resorts International ("MGM") will retain a 5.0% interest in the property. Realty Income will also invest $650 million to acquire a yield-bearing preferred equity interest in the joint venture.

The Bellagio, situated at the center of the Las Vegas Strip in Las Vegas, Nevada, is subject to an existing triple net lease with approximately 26 years of remaining term and is operated and maintained by MGM. The AAA Five Diamond Resort features approximately 4,000 guestrooms and suites across two towers, 157,000 square feet of gaming space and 200,000 gross square feet of state-of-the-art meeting and event facilities. Located on a 77-acre campus, the resort also includes the iconic Fountains of Bellagio and multiple Michelin Star restaurants.

"Realty Income seeks to invest in high-quality real estate at scale in partnership with operators who are leaders in their respective industries. This transaction to acquire an interest in the Bellagio, an iconic property, represents our second investment in the gaming industry and exemplifies the advantages of our size, scale and access to capital," said Sumit Roy, Realty Income's President and Chief Executive Officer. "We are pleased to initiate our Credit Investment platform through a preferred equity investment in the Bellagio joint venture. Credit Investments are a natural adjacency to our traditional business, allowing us to provide additional value to our clients while leveraging our core competencies in transaction sourcing and structuring, and real estate and credit underwriting and monitoring."

Nadeem Meghji, Head of Blackstone Real Estate Americas said, "Where you invest matters and this transaction demonstrates the strong investor demand for the high-quality assets we have assembled within BREIT. The Bellagio is an iconic property in the heart of the Las Vegas Strip and we look forward to our continued ownership of this asset, now in partnership with Realty Income. This partial sale represents another terrific outcome for BREIT shareholders."

The existing Bellagio triple net lease structure with MGM includes 2.0% annual rent escalators for the next six years, the greater of 2.0% or CPI (capped at 3.0%) in years 7-16, and the greater of 2.0% or CPI (capped at 4.0%) in years 17-26. Realty Income's common equity ownership interest will be subordinate to its $650 million preferred equity investment in the venture. Additionally, the Bellagio has property-level debt with an outstanding principal balance of approximately $3.0 billion, a remaining tenor of approximately 6.2 years and a 3.67% (fixed) all-in interest rate.

The transaction is expected to close in the fourth quarter of 2023 and is subject to customary closing conditions.

PJT Partners served as lead financial advisor to BREIT, and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, SG Americas Securities, LLC, Desjardins Capital Markets, and Mizuho Securities USA LLC also served as financial advisors. Simpson Thacher & Bartlett LLP is acting as BREIT's legal counsel.

Realty Income Investor Presentation

An investor presentation regarding the transaction will be available in the investors section of Realty Income's corporate website at www.realtyincome.com/investors.

About Realty Income

Realty Income, The Monthly Dividend Company^®, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats^® index. We invest in people and places to deliver dependable monthly dividends that increase over time. The company is structured as a real estate investment trust ("REIT"), and its monthly dividends are supported by the cash flow from over 13,100 real estate properties primarily owned under long-term net lease agreements with commercial clients. To date, the company has declared 638 consecutive monthly dividends on its shares of common stock throughout its 54-year operating history and increased the dividend 121 times since Realty Income's public listing in 1994 (NYSE: O). Additional information about the company can be obtained from the corporate website at www.realtyincome.com.

About Blackstone Real Estate Income Trust

Blackstone Real Estate Income Trust, Inc. (BREIT) is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors. BREIT invests primarily in stabilized, income-generating U.S. commercial real estate across key property types and to a lesser extent in real estate debt investments. BREIT is externally managed by a subsidiary of Blackstone (NYSE: BX), a global leader in real estate investing. Blackstone's real estate business was founded in 1991 and has approximately $333 billion in investor capital under management. Further information is available at www.breit.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. You can identify these statements by the fact that they do not relate strictly to historical or current facts, and when used in this press release, the words "estimated," "anticipated," "expect," "believe," "intend," "continue," "should," "may," "likely," "plans," and similar expressions are intended to identify forward-looking statements. Examples of these forward-looking statements include discussions of the pending transaction and the expectations upon the closing thereof, intentions of management, Realty Income's or BREIT's business and portfolio including growth platforms and strategies, and acquisitions including anticipated leases, timing, and other terms. Forward-looking statements are subject to risks and uncertainties, which may cause actual future results to differ materially from expected results. Some of the factors that could cause actual results to differ materially are, among others, the timing and ability to consummate the pending transaction; the occurrence of any event, change or other circumstance that could delay the closing of the transaction, or result in the termination of the agreement for the transaction; and adverse effects on Realty Income's or BREIT's common stock because of a failure to complete the transaction.  Other factors that could cause results to differ materially are described in the filings made from time to time by Realty Income and BREIT with the U.S. Securities and Exchange Commission and include the risk factors and other risks and uncertainties described in Realty Income's and BREIT's respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2022 and Quarterly Reports on Form 10-Q and subsequent filings. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements are not guarantees of future plans and performance and speak only as of the date of this press release. Actual plans and operating results may differ materially from what is expressed or forecasted in this press release. Except as required by law, Realty Income and BREIT do not undertake any obligation to update forward-looking statements or publicly release the results of any forward-looking statements that may be made to reflect events or circumstances occuring after the date hereof or the occurrence of unanticipated events.

SOURCE Realty Income Corporation