Blackstone Group seeks to sell Las Vegas Strip Casino for $ 5 billion

A casino on the Las Vegas Strip could be sold if the group of owners gets the hefty price they are asking.

According to a report by Bloomberg, The Blackstone group is trying to sell the Cosmopolitan of Las Vegas Vegas for $ 5 billion. In April 2019, the New York-based investment group sought to offload the property for $ 4 billion, but never made a transaction.

Blackstone bought the casino from Deutsche Bank AG in 2014 for $ 1.73 billion. The company added an additional $ 500 million in renovations, bringing its total cost to $ 2.23 billion. Deutsche Bank spent $ 3.9 billion to build the property and ended up selling at a loss after running into trouble during the Great Recession.

It is reported that Apollo Global Management Inc, which was part of the group that bought the Las Vegas Sands Strip properties last March and was in a bidding war to buy William Hill’s international sports betting operations at the start. of the month, is interested in paying the $ 5 billion price tag.

Although it was unable to generate a sale in 2019, Blackstone spent the next two years increasing its exposure to the Las Vegas casino market. As real estate prices continued to climb, the company was one of MGM’s major buyers of real estate as the gaming giant continued with its “thin assets strategy” where MGM unloaded the underlying real estate, paid rent to the new owners, and continued to own the business that operated in brick-and-mortar casinos.

Blackstone bought the Bellagio for $ 4.25 billion in October 2019, was part of a joint venture with MGM Growth properties to buy the MGM Grand and Mandalay Bay for a combined $ 4.6 billion at the start of 2020 and recently bought Aria and Vdara from MGM last July for $ 3.89 billion. With these purchases and his ownership of the Cosmopolitan, Blackstone is involved in most of the business at the south end of Las Vegas Boulevard.

By offloading the Cosmopolitan, Blackstone would limit its risk of a downturn in tourism and the casino industry as a whole, and essentially become the owner of a good chunk of MGM’s casinos in Las Vegas.

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