Core Insights - Realty Income (O) is making a significant move by investing $800 million in perpetual preferred equity for the CityCenter Las Vegas assets, which includes the ARIA Resort & Casino and Vdara Hotel & Spa, indicating a strategic shift from its traditional net-lease retail and industrial focus [1][9] - The transaction is set to close on December 9, and it marks Realty Income's second partnership with Blackstone, following their Bellagio Las Vegas venture in 2023, with plans to deploy over $6.0 billion in 2025 [2] - The preferred equity investment offers a 7.4% initial unlevered return with annual escalators starting in year five, and an 8.325% IRR make-whole clause, allowing Realty Income to gain exposure to hospitality assets while mitigating management risks [3][9] Investment Structure and Performance - CityCenter is under a long-term triple net lease with approximately 26 years remaining and three 10-year extension options, featuring 5,500 rooms, gaming areas, retail, dining, and 500,000 square feet of convention space, which supports strong cash flow [4] - Realty Income has invested $3.9 billion globally through Q3 2025, focusing on European markets due to attractive yields and less competition, diversifying into industrial, gaming, and data centers [5] Market Position and Valuation - Realty Income's shares have increased by 7.5% year-to-date, contrasting with a 6.4% decline in the industry [8] - The company trades at a forward 12-month price-to-FFO of 13.03, slightly below the industry average but close to its one-year median of 13.11, with a Value Score of D [10] - Recent adjustments to the Zacks Consensus Estimate show a downward revision for O's 2025 FFO per share, while the estimate for 2026 has been revised upward [11]