Blackstone has agreed to sell The Cosmopolitan of Las Vegas for $5.65bn.
The agreement is signed with MGM Resorts International, which intends to acquire the operations of The Cosmopolitan and sign a long-term net lease with a partnership between Cherng Family Trust and Stonepeak Partners. Blackstone Real Estate Income Trust, Inc. will acquire The Cosmopolitan’s real estate assets.
The transaction is expected to close in early 2022, subject to regulatory approvals. Bloomberg reported the sale will earn profits of about $4.1bn, including cash flow from operations at the property.
“This transaction underscores Blackstone’s ability to acquire and transform large, complex assets,” said Tyler Henritze, Head of Acquisitions Americas for Blackstone 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.”
Phill Solomond, Head of Real Estate at Stonepeak, noted the “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.”
Blackstone acquired The Cosmopolitan in 2014 for $1.73bn, and has invested over $500m to renovate it. A total of 3,000 guest rooms in the venue were upgraded, and the renovation included 67 new rooms. The company also improved the gaming amenities and common areas.