It is its most profitable sale ever, company claims
Blackstone has agreed to sell The Cosmopolitan of Las Vegas for $5.65 billion – its most profitable property asset sale to date.
Blackstone acquired the luxury resort and casino on the Las Vegas Strip in 2014 for approximately $1.8 billion and invested $500 million in renovations. The firm expects to make $4.1 billion after the sale, including cash flow from the property’s operations.
“This transaction underscores Blackstone’s ability to acquire and transform large, complex assets,” said Tyler Henritze, head of acquisitions Americas for Black Stone Real Estate. “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. The management team and employees at The Cosmopolitan, led by CEO Bill McBeath, flawlessly executed an ambitious business plan, including navigating a challenging period for the entire industry, to position the property for such a high level of success.”
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Blackstone noted that the agreement separates ownership of the real estate from its operations, which are being sold to MGM Resorts International for $1.625 billion. MGM will sign a long-term lease with investment firm Stonepeak Partners, Cherng Family Trust – a Las Vegas-based family office for the founders of the Panda Restaurant Group – and Blackstone Real Estate Income Trust. Black Stone’s real-estate investment trust will acquire the property for $4 billion.
“Stonepeak, in partnership with the Cherng Family Trust, believes this transaction represents a fantastic opportunity to invest in the underlying real estate of The Cosmopolitan of Las Vegas, a solid asset with an irreplaceable location, durable cash flows and the potential for additional upside,” said Phill Solomond, head of real estate at Stonepeak.
Blackstone said that it has secured roughly 3,000 stable jobs for employees that will continue to serve at the hotel. The deal is anticipated to close in early 2022, subject to regulatory approvals and other customary closing conditions.
