Blackstone In Potential Deals To Sell Vegas Strip Casino and Luxury Hotel The Cosmopolitan, Expected Value Of Property Around $4BN

According to reports from The Wall Street Journal, Blackstone Group LP, an American private equity firm is exploring the possibility of putting The Cosmopolitan of Las Vegas up for sale. In addition to this, the company is seeking financial expert services…

…from the PJY Partners Incorporated and Deutsche Bank AG regarding finding the potential deal. Though there aren’t any official conformations on this yet, perhaps to the sensitivity of the whole matter, the alleged sale is believed to be worth no less than $4bn.

Setting Solid Foundations

Blackstone bought the hotel and casino in 2014 for $1.73bn from Deutsche Bank. The Bank gained ownership in the first place in 2008, due to crisis-related loan default. As far as the Blackstone co-head of real estate, Ken Caplan, saw this purchase, it was the classic “buy-it, fix-it, sell-it” opportunity. With that being said…

…the company invested another $500m into the complete renovation of the 8.5-acre Nevada.

Slight Decrease Of Visitors

As far as the report says, the potential venue offloading could be due to the progressive decrease of visitors. Though the figures in 2016 claimed that Las Vegas welcomed around 43 million visitors, the number has subsequently declined to 42m. Nevertheless…

…due to the location, value and the overall performance of the brand, the value estimated worth won’t be diminished. What strongly favors such opinion is the fact that the property’s EBITDA has almost tripled since 2014.

Interested Sides

A multitude of prominent industry giants show interest in purchasing the property. One of them is MGM Resorts which has recently inked a deal with MLS, according to which they became the first official gaming partner of USA’s professional soccer league. Another one among these huge players is Wynn Resorts…

… which is also in another acquisition negotiation. The proposed Wynn deal is the acquisition of Australia’s casino giant, Crown Resorts, with the expected value of the deal around AU$10bn. However, Kuala Lumpur-based, Genting Malaysia Berhad, is also expected to line up and potentially place the winning bid.

If the property goes on sale, it would be the first major operating hub coming to market in more than 10 years. The one having similar value to this one, in every possible aspect is the expected Caesars sale, which is to take place in days to come.

Source:

“Blackstone Preparing to Sell Vegas Strip Casino and Luxury Hotel”, Karmin Craig, wsj.com, April 17, 2019.