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

National /
Apr.April 17, 2019 03:30 PM
Blackstone Group CEO Stephen Schwarzman and the Cosmopolitan of Las Vegas (Credit: Getty Images and Wikipedia)
Blackstone Group CEO Stephen Schwarzman and the Cosmopolitan of Las Vegas (Credit: Getty Images and Wikipedia)

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


Related Articles

arrow_forward_ios
808 S. Broadway and Steve Needleman of Anjac Fashion Buildings (Google Maps, Getty)
Downtown LA’s biggest rentals set for Fashion District
Downtown LA’s biggest rentals set for Fashion District
LTC Properties CEO Wendy Simpson (Getty)
Senior housing mortgage REIT puts $46M into Q3 deals
Senior housing mortgage REIT puts $46M into Q3 deals
PS Business Parks CEO Mac Chandler and new CFO Adeel Khan (PS Business Parks, LinkedIn via Khan)
PS Business Parks taps former Rexford exec as CFO
PS Business Parks taps former Rexford exec as CFO
Councilmember Joe Busciano and Council President Nury Martinez (Getty, Busciano)
LA delays vote on strict vaccine requirement for indoor spaces
LA delays vote on strict vaccine requirement for indoor spaces
SoLa Impact founder and CEO Martin Muoto, whose firm plans an apartment complex in Park Mesa Heights (Google Maps, SoLa Impact)
SoLa Impact plans 195-unit rental complex in Park Mesa Heights
SoLa Impact plans 195-unit rental complex in Park Mesa Heights
LA County Board of Supervisors. From left to right: Holly J. Mitchell, Janice Hahn, Sheila Kuehl, Kathryn Barger and Hilda L. Solis (Getty, Board of Supervisors)
LA County commercial landlords can’t evict tenants just yet
LA County commercial landlords can’t evict tenants just yet
CAA president Richard Lovett and ICM chairman Chris Silbermann with 2000 Avenue of the Stars and Constellation Place at 10250 Constellation Blvd (Getty, Viracon, Gensler)
Talent agency megamerger leaves Century City office leases in doubt
Talent agency megamerger leaves Century City office leases in doubt
USPS nears lease for 100K sf distribution center in City of Industry
USPS nears lease for 100K sf distribution center in City of Industry
USPS nears lease for 100K sf distribution center in City of Industry
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...