Blackstone announced that they are selling the Cosmopolitan hotel and casino for a total of $5.65 billion. MGM will be taking over operations, and the land will be sold to a group of buyers, including Blackstone real estate investment firm.
MGM Resorts International would acquire the operations of the casino and hotel from the Blackstone Group in a deal worth $1.625 billion.
According to the deal, MGM will enter into a 30-year lease that can be renewed three times for ten years each. MGM will pay $200 million in rent per year, with a 2% increase every year for the first 15 years.
The transaction is expected to be completed in the first half of 2022.
Blackstone will receive a significant profit from the sale. The company bought the Cosmopolitan in 2014 for $1.73 billion and spent $500 million to renovate the 3,000+ rooms hotel, casino, and restaurants.
The announcement marks another sign of solid recovery of the Strip after a dismal 2020 when casinos in the area saw a decrease of revenue by 26.7%.
Some other deals on the Strip this year include:
- Vici Properties announced that they would buy MGM Growth Properties (MGM’s real estate investment firm) for $17.2 billion. MGM would receive $4.4 billion in cash.
- MGM got approval to buy Dubai World’s 50% ownership of CityCenter for $2.1 billion.
- MGM intends to sell the Aria and Vdara resorts to Blackstone for $3.89 billion.
- The Apollo group purchased the Venetian Resort and Sands Expo and Convention center from Las Vegas Sands for $6.25 billion.
These deals show Las Vegas is recovering. July saw a 33% increase in revenue from July 2019 for a total of $1.36 billion, making it the fifth month surpassing $1 billion. For comparison, Nevada recorded $7.87 billion in revenue for the whole of 2020.
