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Blackstone to sell Cosmopolitan casino and hotel in Las Vegas for $5.65 billion

By Arghyadeep on Sep 27, 2021 | 03:37 AM IST

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Blackstone Inc on Monday said it has reached a deal to sell The Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65 billion and will separate the property from the hotel’s operations.

As part of the deal, MGM Resorts International will buy the operations of The Cosmopolitan for $1.63 billion.

The casino and resort operator will also enter into a 30-year lease agreement, after the close of operations deal, with a partnership among Stonepeak Partners, Cherng Family Trust, and Blackstone Real Estate Income Trust Inc, which will acquire The Cosmopolitan’s real estate assets, MGM said in a statement.

Deutsche Bank AG built The Cosmopolitan for $3.9 billion after running into financial trouble at the time of construction during the Great Recession. The casino and the hotel opened in 2010, but after four years, the German bank sold the asset to Blackstone for $1.73 billion.

The asset manager in the statement said it has spent over $500 million “to renovate nearly 3,000 guest rooms, build 67 new rooms and suites, enhance the food and beverage offerings and dramatically improve the gaming amenities and common areas.”

The total profit after the sale will be around  $4.1 billion, including cash flow from operations at the property, The Wall Street Journal reported Monday, citing a Blackstone letter to fund investors.

“This transaction underscores Blackstone’s ability to acquire and transform large, complex assets. As owners of The Cosmopolitan, we invested strategic capital and brought our expertise and experience in the lodging space to create the most dynamic destination on the Las Vegas Strip,” said Tyler Henritze, Head of Acquisitions Americas for Blackstone Real Estate, in the statement.

The asset manager said The Cosmopolitan, which sits between CityCenter and the Blackstone-owned Bellagio casino, has been performing stronger than ever, exceeding pre-pandemic levels in the second quarter of this year.

The deal is expected to close in the first half of 2022.

Picture Credit: Review Journal

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