After securing approval from the Nevada Gaming Commission last week, MGM Resorts has finally closed its transaction with New York-based investment giant Blackstone to operate the property.
This sees MGM Resorts enter a 30-year lease agreement with Stonepeak, Cherng Family Trust and Blackstone Real Estate Income Trust (BREIT), a three-way partnership that acquired The Cosmopolitan’s real estate assets.
The operator will pay an initial yearly rent of $200m, escalating annually at 2% for the first 15 years and then up to 3% thereafter. MGM Resorts also retains three 10-year renewal options.
More importantly, The Cosmopolitan joins MGM Resorts’ other properties on the Las Vegas Strip, including the Bellagio and CityCenter, both of which are leased from Blackstone.
In the 12 months to 31 March 2022, The Cosmopolitan generated $1.1bn in net revenue and $416m in adjusted EBITDAR.
“This is a big moment for our company and for the Las Vegas Strip,” said MGM Resorts CEO and President Bill Hornbuckle.
“The Cosmopolitan of Las Vegas has already established itself as one of the Strip’s premier resorts with an iconic brand, well-curated experiences and a loyal customer base. We couldn’t be more excited to bring them into our portfolio of world-class operations.”
He added: “We look forward to improving upon The Cosmopolitan’s already strong results by offering their customers access to the extensive and exclusive amenities and other benefits only MGM Resorts can provide.”
This news comes after a decision by MGM Resorts to sell the operations of the Mirage to Hard Rock International, and more recently, its $607m offer for LeoVegas.
