Blackstone announced Monday that Blackstone Real Estate Partners VII L.P. (BREP) has agreed to sell The Cosmopolitan of Las Vegas for $5.65 billion.
Blackstone said, since acquiring The Cosmopolitan in 2014, it implemented significant operational changes and invested over $500 million into the property to renovate nearly 3,000 guest rooms and build 67 new rooms and suites. ”Blackstone also reached agreements with unions at the property and secured approximately 3,000 stable jobs for professionals that will continue to serve guests of the hotel.”
Tyler Henritze, Head of Acquisitions Americas for Blackstone Real Estate, said: “This transaction underscores Blackstone’s ability to acquire and transform large, complex assets. 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.”
”BREP conducted a thorough process, throughout which it considered a broad range of potential options for The Cosmopolitan and determined that separating the asset’s operations from the underlying real estate would result in an optimal outcome,” said Blackstone in a press release.
Under the agreement, MGM Resorts International plans to acquire the operations of The Cosmopolitan and sign a long-term net lease with a partnership between Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust, Inc. (“BREIT”), which will acquire The Cosmopolitan’s real estate assets.
“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.
The transaction is expected to close in early 2022, subject to regulatory approvals and other customary closing conditions.
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