Blackstone REIT and Investors Sign 30-Year Lease with MGM Resorts
May 18, 2022 | MGM Resorts International
MGM Resorts International completed the acquisition of the operations of The Cosmopolitan of Las Vegas hotel and casino resort from Blackstone Inc. for $1.625 billion. MGM entered a 30-year lease agreement, with three 10-year renewal options, with a group including Stonepeak Partners LP, Cherng Family Trust and Blackstone Real Estate Income Trust Inc., which bought the real estate assets of the resort.
“This is a big moment for our company and for the Las Vegas Strip. 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,” said MGM Resorts CEO and President Bill Hornbuckle. “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, 2022, The Cosmopolitan generated $1.1 billion of net revenue and $416 million of adjusted EBITDAR.1
The Cosmopolitan, a leading 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 famed Las Vegas Strip,
• a 110,000 square-foot casino, with high-end gaming areas for VIP guests,
• 26 on-trend food and beverage offerings, with 19 new concepts introduced in the last four years,
• a 3,200-seat theater (The Chelsea),
• Marquee nightclub and dayclub that hosts top DJs from around the world,
• 243,000 square feet of centrally located meeting space, featuring state-of-the-art technology to accommodate both large and small groups,
• 36,000 square feet of leased retail space, and
• a 43,000 square foot spa and fitness facility.
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.
1 Calculated as EBITDA before rent, impairment loss and pre-opening expenses, and after corporate expenses.
