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Blackstone has agreed to sell Las Vegas Cosmopolitan for $ 5.7 billion and has completed a turnaround at the resort. Was devastated Due to losses and labor disputes before Stephen Schwartzmann’s private equity firm took ownership seven years ago.
MGM Resorts International is paying $ 1.6 billion to take over the operation of a 3,000-room hotel overlooking the Las Vegas Strip. This hotel has a nightclub, a casino and over 20 bars and restaurants.
In the simultaneous transaction, the skyscraper itself will be acquired by three investors consisting of Stonepeak Infrastructure Partners, a vehicle managed by the family of Panda Express founder Andrew Cherng, and one of Blackstone’s own real estate funds.
“The Cosmopolitan management and employees [chief executive] Bill McBees has perfectly implemented an ambitious business plan, including overcoming difficult times for the industry as a whole, “said Tyler Henrytz, head of acquisition of Blackstone Real Estate’s Americas. Stated.
Deutsche Bank sold out Cosmopolitan in 2014 was $ 1.7 billion, less than half the cost of building a resort.
The deal leaves German lenders away from real estate, which had posted a net loss of $ 100 million a year, and plans for the casino industry, which began at the height of the financial crisis when developer Ian Eichner defaulted. I was able to break away from outside bets. Construction loan.
The beaten rating helped load the dice in favor of Blackstone. The Wall Street Group has invested more than $ 500 million to build 67 new rooms and suites and refurbish other rooms and suites that already needed attention just a few years after the resort opened in 2010. bottom.
Blackstone has also settled a labor dispute with the Unite Here union, which has fought Germany over the terms of 2,000 bartenders and culinary staff.
Las Vegas tourism has recovered strongly this year after stopping during a pandemic last year. According to the Las Vegas Convention and Visitors Authority, about 3.3 million people visited the desert city in July, not far from the 3.7 million people who visited in the same month of 2019.
Revival proves Blackstone’s decision to double the sector last year, despite a plunge in asset value over fears that reservations would run out and conventions and drinkers might not come back for years. increase.
Blackstone said Cosmopolitan reported financial performance “beyond pre-Covid levels” in the three months to June.
Blackstone hits the $ 5.7 billion Cosmopolitan casino sale
Source link Blackstone hits the $ 5.7 billion Cosmopolitan casino sale