MGM acquires operations of The Cosmopolitan for $1.625B

MGM Resorts International has closed on its transaction with Blackstone to acquire the operations of The Cosmopolitan of Las Vegas for cash consideration of $1.625 billion. With the closing of the transaction, the resort-casino officially joins MGM Resorts’ roster of properties along the Las Vegas Strip.

“This is a big moment for our company and for the Las Vegas Strip,” said Bill Hornbuckle, CEO/president, MGM Resorts. “The Cosmopolitan of Las Vegas has already established itself as one of the Strip’s premier resorts with an iconic brand, well-curated experiences and a loyal customer base. We couldn’t be more excited to bring them into our portfolio of world-class operations. We’re also thrilled to have the talented group of CoStars from The Cosmopolitan joining the MGM Resorts family. We look forward to improving upon The Cosmopolitan’s already strong results by offering their customers access to the extensive and exclusive amenities and other benefits only MGM Resorts can provide.”

In the trailing 12 months ended March 31, The Cosmopolitan generated $1.1 billion of net revenue and $416 million of adjusted earnings before interest, taxes, depreciation, amortization and restructuring or rent costs (EBITDAR).

The Cosmopolitan, a contemporary luxury resort and casino, opened in December 2010 and underwent significant capital improvements following Blackstone’s acquisition of the property in 2014. The property features:

  • 3,033 rooms and suites that were renovated in December of 2018, most of which feature terraces overlooking the Strip
  • 110,000-sq.-ft. casino
  • 26 food and beverage offerings, with 19 new concepts introduced in the last four years
  • 3,200-seat theater (The Chelsea)
  • Marquee nightclub and dayclub that hosts top DJs from around the world
  • 243,000 sq. ft. of meeting space
  • 36,000 sq. ft. of leased retail space
  • 43,000-sq.-ft. spa and fitness facility

MGM Resorts entered into a 30-year lease agreement, with three 10-year renewal options, with a partnership among Stonepeak, Cherng Family Trust and Blackstone Real Estate Income Trust Inc., which acquired The Cosmopolitan’s real estate assets. MGM Resorts will pay an initial annual rent of $200 million, escalating annually at 2% for the first 15 years and the greater of 2% or the CPI increase (capped at 3%) thereafter.