Blackstone completes a $4.1 billion deal with MGM International to sell a Las Vegas casino.
The Blackstone Group said on Monday that it had reached an agreement to sell The Cosmopolitan casino and hotel for $5.65 billion, setting a new record.
“Blackstone’s capacity to buy and restructure large, complex assets is demonstrated by this acquisition. In a statement announcing the transaction, Tyler Henritze, the head of acquisitions Americas for Blackstone, said, “As owners of The Cosmopolitan, we invested strategic capital and contributed our knowledge and experience in the lodging business to build the most exciting destination on the Las Vegas Strip.”
The Cosmopolitan was purchased from Deutsch Bank in 2014, and Blackstone invested $500 million renovating the hotel, which featured renovated guest rooms, new luxury suites, and new bars and restaurants. The Cosmopolitan’s success “exceeded pre-COVID” levels of business in the second quarter of 2021, according to the company.
The Cosmopolitan’s operations would be sold to MGM Resorts International under a 30-year lease arrangement, while the underlying real estate would be sold to a partnership comprised of Stonepeak Partners, Cherng Family Trust, and Blackstone Real Estate Income Trust Inc. (BREIT). The separation of The Cosmopolitan’s operations from the property’s ownership was considered as the “most optimal solution,” according to Blackstone.
MGM Resorts CEO and President Bill Hornbuckle said the company paid $1.61 billion for the property’s operations.
Hornbuckle stated, “We are thrilled to add The Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio.” “The Cosmopolitan brand is known around the world for its diverse customer base and high-quality products and experiences, making it an excellent fit for our portfolio and helping us achieve our goal of being the world’s leading gaming entertainment company.”
The Cosmopolitan presents a wonderful chance to increase our customer base and will provide greater depth of choice for our visitors in Las Vegas, according to MGM Resorts CFO Jonathan Halkyard.
According to The Real Deal, Blackstone had been selling the property for weeks prior to the announcement of the sale to MGM International.
After gaining regulatory approval and meeting other normal closing conditions, the sale is not likely to close until early 2022.