Investments in Unconsolidated Entities

9 Months Ended

Sep. 30, 2024

Equity Method Investments and Joint Ventures [Abstract]

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

The following is a summary of our investments in unconsolidated entities as of September 30, 2024 and December 31, 2023 (dollars in thousands):

	Ownership %	Number of Properties	Carrying Amount (1) of Investment as of
Investment	As of September 30, 2024		September 30, 2024		December 31, 2023
Bellagio Las Vegas Joint Venture - Common Equity Interest	21.9%	1	$	278,944	$	296,097
Bellagio Las Vegas Joint Venture - Preferred Equity Interest	n/a	n/a	650,000		650,000
Data Center Joint Venture	80.0%	2	296,030		226,021
Total investment in unconsolidated entities			$	1,224,974	$	1,172,118

(1) The total carrying amount of the investments was greater than the underlying equity in net assets (i.e., basis difference) by $7.7 million as of September 30, 2024. The basis difference is primarily attributable to capitalized interest for the data center joint venture development funding.

A.    Bellagio Las Vegas Joint Venture Interests

The joint venture we formed with Blackstone Real Estate Income Trust owns a 95.0% interest in the real estate of The Bellagio Las Vegas. We made an initial investment in October 2023, including $301.4 million of common equity for an indirect interest of 21.9% in the property and a $650.0 million preferred equity interest. During the nine months ended September 30, 2024, we recognized interest income of $39.5 million for 8.1% preferential cumulative distributions within 'Other' revenue in our consolidated statements of income and comprehensive income. The unconsolidated entity had total debt outstanding of $3.0 billion as of September 30, 2024, all of which was non-recourse to us with limited customary exceptions.

B.    Data Center Joint Venture

We own an 80.0% equity interest in the joint venture that we formed with Digital Realty Trust. As we do not control this VOE, we account for it under the equity method. This joint venture owns and operates two data centers. Our maximum exposure to loss associated with this joint venture is limited to our equity investment and our pro rata share of the remaining $35.4 million of estimated development costs for the first phase of the project.