The Cosmopolitan, the last ground-up gaming resort to open on the Las Vegas Strip in a decade, is reportedly for sale.
The Wall Street Journal said owner Blackstone Group is looking to unload the luxury casino hotel and has retained Deutsche Bank and PJT Partners to explore strategic alternatives.
A sale to a major gaming operator could garner upwards of $4 billion, the Journal said, considering the potential synergies to be gained by networking the 3,000-room hotel into an established casino data base.
As a stand-alone The Cosmopolitan already commands average daily room rates that are among the highest on the Strip at more than $330, according to company filings and Journal sources familiar with the matter. Operating performance, as measured by annual earnings before interest, taxes, depreciation and amortization, has nearly tripled to $300 million since Blackstone acquired it in 2014.
The Cosmopolitan opened in 2010 in the midst of the Great Recession as “one of the biggest real estate busts in the U.S. of all time,” the Journal said. Deutsche Bank took control of the property in 2008 after the original owner defaulted and plowed around $4 billion into it before selling it to Blackstone for less than half that amount.
The New York-based private equity giant has spent another $500 million in renovations, including converting the hotel’s top four floors, which were unfinished at the time of its purchase, into 21 large suites aimed at the international high-roller market. It also added 18 new bars and restaurants in an effort to appeal to a younger crowd.
