What are the odds? Rare Las Vegas Strip casino hits the market
The New York investment firm made the once-failing property one of the most successful on the Strip
The Cosmopolitan hotel and casino was one of the biggest failures of the Las Vegas Strip in the last decade. Now, five years after buying and reversing its fortunes, Blackstone Group is reportedly exploring a sale.
The New York-based investment giant has retained Deutsche Bank and PJT Partners Inc. to explore options for the property, including a sale, according to the Wall Street Journal. If sold to a casino operator, the property could be earn $4 billion or more. That’s about double the $1.7 billion Blackstone paid for it in 2014.
The 110,000-square-foot hotel with 3,000 rooms sits next to the Bellagio and will likely attract interest from other resort and casino operators, including larger local players or international operators like Malaysia’s Genting Group.
The $330 average daily room rate at the Cosmopolitan is the highest on the Las Vegas Strip and earnings before interest, taxes, depreciation and amortization is around $300 million, sources told the Journal.
Those earnings are more than triple the earnings of the hotel before Blackstone bought the property from Deutsche Bank, which took over the unfinished property after the Bruce Eichner-led development group behind it defaulted on a construction loan.
The property opened in late 2010. Blackstone invested $500 million in the renovations, including converting the four then-unfinished top floors of the hotel into 21 suites meant to attract high rollers. It also built 18 new bars and restaurants at hotel and casino.
Blackstone benefited from strong tourist activity in Las Vegas during its ownership of the hotel, including an all-time peak of 43 million tourist visits to the city in 2016. [WSJ] — Dennis Lynch