MGM will acquire the operations of The Cosmo
By Toni Gonzales | Las Vegas, NV | The Cosmopolitan
Blackstone Inc. has agreed to sell The Cosmopolitan for $5.65 billion dollars. The Cosmopolitan was bought by Blackstone Inc. for a reported $1.7 billion dollars seven years ago. Since then, the company has invested half a billion on upgrades to the property including upgraded guest rooms, a 3,200 square foot theater and bringing in some of the most eclectic restaurants found on the Las Vegas strip. For those who don’t care to do the math, after all is said and done the profits of the sale will be just over $4 billion dollars.
The jaw-dropping sale comes with several interesting tidbits. Officially, the sale of the Cosmopolitan is from the private equity firm of Blackstone Real Estate Partners VII LP to the Cherng Family Trust. The Cherng Family Trust is made up of Andrew and Peggy Cherng of Panda Express fame, an alternative real estate investment firm Stonepeak Partners and Blackstone Real Estate Income Trust, Inc.
You have likely heard the MGM name tied to the sale. That is because MGM will acquire the operations of the Cosmo. They are paying $1.625 billion to Blackstone for this. The agreement states that MGM will enter into a 30-year lease agreement, three 10-year renewal options. MGM will pay $200 million in rent annually with 2% increases every year for the first 15 years.
Put simply, Blackstone is selling the Cosmo to a group of buyers – that includes a Blackstone Real Estate trust – while the resort operations will be sold to the MGM. This will increase the MGM name even more along the Las Vegas Strip.
The sale is expected to be finalized in early 2022.
The Cosmopolitan is looking for a local artist to award a scholarship. Read more about it here.
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