One of the leading Las Vegas Strip hotels has been sold.
Blackstone Real Estate has reached an agreement to sell The Cosmopolitan for $5.65 billion.
MGM Resorts International will add to its Vegas portfolio by acquiring hotel operations in The Cosmopolitan for $1.625 million.
"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," Tyler Henritze, Head of Acquisitions Americas for Blackstone Real Estate, said in a statement. "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."
Since acquiring The Cosmopolitan in 2014, Blackstone implemented significant operational changes and invested over $500 million into the property to renovate nearly 3,000 guest rooms, build 67 new rooms and suites, enhance the food and beverage offerings and dramatically improve the gaming amenities and common areas. 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.
Under the agreement, MGM Resorts International intends 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., which will acquire The Cosmopolitan's real estate assets.
The transaction is expected to close in early 2022, subject to regulatory approvals and other customary closing conditions.
MGM will enter a 30-year lease with three 10-year renewal options, according to our sister publication Travel Weekly.
MGM CEO Bill Hornbuckle said that acquiring the Cosmopolitan's resort operations is "an incredible opportunity to expand our customer base."
"The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world's premier gaming entertainment company," Hornbuckle said.
The deal continues an MGM strategy to operate resorts but not own the real estate. In August, a $17 billion deal was announced to sell MGM Growth Properties, a real estate arm of the company, to Vici Properties.
In July, MGM agreed to buy out Infinity World Development Corp. for sole ownership of CityCenter, the Las Vegas Strip complex that includes the Aria and Vdara hotels and sits next door to the Cosmopolitan. Upon completion of the deal, MGM will control CityCenter resort operations but will sell the real estate to Blackstone Group for $3.89 billion.
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