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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Nevada Gaming Commission OKs $1.73B Cosmopolitan sale

19 December 2014

LAS VEGAS -- The Cosmopolitan of Las Vegas could be under new management as soon as Friday.

The Nevada State Gaming Commission Thursday signed off on the $1.73 billion purchase of Strip resort by Blackstone Real Estate Partners VII, a division of New York City-based Blackstone Group, a multinational private equity investment fund.

The deal could close by Friday and is expected to breath new life into the 2,995-room hotel-casino that has never turned an annual operating profit since opening in December 2010.

Gaming commissioners commended Blackstone for its investment on the Strip. The company is buying the Cosmopolitan from from Deutsche Bank, which built and opened the property for $3.9 billion after the original owner defaulted on the project.

Deutsche Bank always intended to sell the resort and its 8.7-acre Strip location between Bellagio and CityCenter.

“Today marks the beginning of an exciting journey for both Blackstone and The Cosmopolitan of Las Vegas,” said Blackstone Senior Managing Director, Tyler Henritze. “We look forward to working with (the Cosmopolitan) team and becoming part of the dynamic Las Vegas hospitality community, as we further the success that the resort has experienced to date.”

Earlier this week, Blackstone named longtime gaming executive Bill McBeath as CEO of the Cosmopolitan, replacing the resort’s original CEO, John Unwin, who announced his departure last week.

McBeath, who attended the commission meeting, is the former president of CityCenter.

“I’ve never been more excited to be part of this property,” McBeath told the Gaming Commission.

Gaming Commission Chairman Tony Alamo Jr. and Commissioner John Moran Jr. said McBeath’s addition to the Cosmopolitan gave them confidence on the property’s future.

The Cosmopolitan has a 100,000-square-foot casino and is best-known for its restaurants and nightclubs, including The Chelsea. It recently opened Rose. Rabbit. Lie. and the Marquee, which is one of the top-grossing clubs in the United States. The centerpiece Chandelier Bar in the casino is three stories tall.

Blackstone said the property collects 80 percent of its revenue from the hotel and food and beverage operations. The Cosmopolitan has two 52-story towers and a 110,000-square-foot casino.

The Blackstone division owns $81 billion in real estate assets globally.