Blackstone strikes gold with $5.7bn Cosmopolitan casino sale in Las Vegas
MGM Resorts International will take over operations of the casino and hotel
27 September 2021 - 19:45
byCraig Giammona
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
The Cosmopolitan in Las Vegas, the US. Picture: BLOOMBERG
Blackstone has reached a deal to sell the Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65bn.
The deal will separate the property from the operations of the hotel, according to a statement on Monday.
The Cosmopolitan, which opened in 2010, ran into financial trouble during its construction in the midst of the great recession. Owner Deutsche Bank, which built the property for $3.9bn, sold it to Blackstone in 2014 for $1.73bn. The asset manager spent $500m on upgrades, it said the statement.
The sale will reap total profits of about $4.1bn, including cash flow from operations at the property, The Wall Street Journal reported on Monday, citing a Blackstone letter to fund investors.
MGM Resorts International will take over operations of the Cosmopolitan, while a partnership between the Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust are buying the real estate, according to the statement.
Blackstone tried previously to find a buyer for the property at $4bn or more. Prices for Las Vegas casinos have continued to rise despite the pandemic as real estate investment trusts (Reit) purchase properties and split costs with management firms.
Casino companies have been shedding real estate, often holding on to the management of the properties. Apollo is buying the Venetian resort complex in Las Vegas for $6.25bn in a partnership with Vici Properties, a Reit.
MGM has sold casino properties while continuing to manage them. It agreed in July to sell two Las Vegas hotels at CityCenter to Blackstone for $3.89 billion. The Cosmopolitan sits between CityCenter and the Blackstone-owned Bellagio casino.
Bloomberg News. More stories like this are available on bloomberg.com
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Blackstone strikes gold with $5.7bn Cosmopolitan casino sale in Las Vegas
MGM Resorts International will take over operations of the casino and hotel
Blackstone has reached a deal to sell the Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65bn.
The deal will separate the property from the operations of the hotel, according to a statement on Monday.
The Cosmopolitan, which opened in 2010, ran into financial trouble during its construction in the midst of the great recession. Owner Deutsche Bank, which built the property for $3.9bn, sold it to Blackstone in 2014 for $1.73bn. The asset manager spent $500m on upgrades, it said the statement.
The sale will reap total profits of about $4.1bn, including cash flow from operations at the property, The Wall Street Journal reported on Monday, citing a Blackstone letter to fund investors.
MGM Resorts International will take over operations of the Cosmopolitan, while a partnership between the Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust are buying the real estate, according to the statement.
Blackstone tried previously to find a buyer for the property at $4bn or more. Prices for Las Vegas casinos have continued to rise despite the pandemic as real estate investment trusts (Reit) purchase properties and split costs with management firms.
Casino companies have been shedding real estate, often holding on to the management of the properties. Apollo is buying the Venetian resort complex in Las Vegas for $6.25bn in a partnership with Vici Properties, a Reit.
MGM has sold casino properties while continuing to manage them. It agreed in July to sell two Las Vegas hotels at CityCenter to Blackstone for $3.89 billion. The Cosmopolitan sits between CityCenter and the Blackstone-owned Bellagio casino.
Bloomberg News. More stories like this are available on bloomberg.com
China’s takeover titans reverse tack as valuations soar
Goldman Sachs targets $5bn IPO for alternative investment unit Petershill
Former Blackstone director taps private lending ‘wellspring’ to drive 30% growth
Office property gets new lease on life as life sciences buildings
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
‘Ghost kitchens’ feed into post-Covid eatertainment trend
JSE’s gaming groups keep feeding those slots
Online gambling group 888 to buy William Hill’s international operations
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.