Blackstone to Net $4B Profit in Sale of Vegas Casino
$5,000 Welcome Bonus
The Blackstone Group can head to the slots after netting a record profit for the sale of a single asset: The Cosmopolitan of Las Vegas.
Blackstone has agreed to sell the Las Vegas Strip hotel and casino for more than $5.6 billion, more than three times the $1.8 billion it paid for the property seven years ago. The company stands to make almost $4.1 billion in profit from the sale while making back close to 10 times the equity it invested in the business, according to the Wall Street Journal.
During its brief ownership, Blackstone spent $500 million refurbishing the property, including renovating the guest rooms, building luxury suites and adding new bars and restaurants.
The transaction will separate hotel ownership from casino operations, which MGM Resorts International is picking up for about $1.6 billion. Meanwhile, the property is being sold to a partnership among Blackstone’s REIT, Stonepeak Partners and the Cherng Family Trust for about $4 billion.
The Cosmopolitan was considered a flop of sorts nearly a decade ago, forcing Deutsche Bank to seize ownership after developer Ian Bruch Eichner defaulted. The bank spent close to $4 billion on the property before selling it to Blackstone in 2014.
The property’s luck has since changed, as Blackstone reportedly said as of September 24, the hotel was 87 percent occupied this month at an average nightly rate of $448.
The firm was revealed to be marketing the property a few weeks ago.
Casino properties across Las Vegas are being sold for big bucks as REITs aim to split costs and casino operators look to retain management duties while ditching ownership.
In August, Vici Properties acquired MGM Growth Properties in a deal valued at $17.2 billion. It expanded the company’s portfolio with 15 additional entertainment resorts, including the Excalibur, Luxor and Mirage casinos.
