Blackstone sells Cosmopolitan casino in Las Vegas for $5.65 billion: 5 things to know about the deal
Blackstone, which acquired The Cosmopolitan in 2014, invested over $500 million in the property and has made back nearly 10 times the amount
September 28, 2021 / 12:16 PM IST
Blackstone had acquired The Cosmopolitan in 2014. (Image: Reuters)
Private equity giant Blackstone will sell its The Cosmopolitan casino and hotel on the Las Vegas Strip for $5.65 billion.
"Blackstone today announced that Blackstone Real Estate Partners VII L.P. ('BREP') has reached an agreement to sell The Cosmopolitan of Las Vegas ('The Cosmopolitan') for $5.65 billion," Blackstone said in a statement on September 27.
Here are 5 things to know about the deal:
1 The deal separates the casino operations from the real estate assets. MGM Resorts International will buy the operations of the business for $1.6 billion, while Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust (BREIT) will acquire the property assets for roughly $4 billion, Reuters has reported.
2 MGM will sign a 30-year lease agreement with the buyers and pay an initial annual rent of $200 million with the rate increasing 2 percent annually for the first 15 years.
3 The transaction is expected to close in early 2022, subject to regulatory approvals
4 Deutsche Bank Securities and PJT Partners served as financial advisers to BREP. Simpson Thacher & Bartlett LLP were the legal counsel to BREP.
5 Blackstone has made back nearly 10 times the amount of equity it invested in The Cosmopolitan, The Wall Street Journal reported, citing a letter to investors.
Blackstone had acquired The Cosmopolitan in 2014. Since then, it has invested over $500 million to renovate nearly 3,000 guest rooms, build 67 new rooms and suites and improve the food and beverage offerings.
"As a result of these enhancements, The Cosmopolitan's recent performance has been stronger than ever, exceeding pre-COVID levels in the second quarter of 2021," the company said.