MGM Resorts announced it plans to take over operations for The Cosmopolitan of Las Vegas from private equity firm Blackstone Group for more than $1.6 billion.
Following the close of the deal, MGM will enter into a 30-year lease agreement, with three 10-year renewal options, in a partnership among Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust Inc., which will acquire The Cosmopolitan’s real estate assets. MGM will pay an initial annual rent of $200 million, which will increase annually at 2% for the first 15 years and the greater of 2% or the Consumer Price Index increase (up to 3%) from then on.
Blackstone acquired The Cosmopolitan in 2014—the property originally opened in 2010—and invested $500 million for upgrades and renovations.
"With over $500 million of capital invested to upgrade the property since 2014, The Cosmopolitan offers an incredible opportunity to expand our customer base and will provide greater depth of choices for our guests in Las Vegas," said MGM Resorts CFO Jonathan Halkyard in a press release. "We believe that we can leverage MGM Resorts' expertise, operating platform and other highly achievable synergies to continue providing best-in-class service, while driving growth for the property."
The transaction is expected to close in the first half of 2022 and is subject to regulatory approvals and other customary closing conditions.
The Cosmopolitan of Las Vegas offers 3,032 guest rooms and suites, which were renovated in late 2018, a 110,000-square-foot casino and 243,000 square feet of meeting space.
"We are proud to add The Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio," said MGM Resorts CEO and President Bill Hornbuckle in a press release. "The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world's premier gaming entertainment company. We look forward to welcoming The Cosmopolitan's guests and employees to the MGM Resorts family."
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