MGM Resorts International has entered into a definitive agreement with Blackstone to acquire the operations of the Cosmopolitan of Las Vegas for €1.531 million.
Following the closing of the transaction, MGM Resorts has confirmed that it will enter into a 30-year lease, with three 10-year renewal options, with a partnership between Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, which will acquire the Cosmopolitan real estate assets. MGM Resorts will pay an initial annual rent of $200 million, increasing annually at 2% for the first 15 years and either the 2% increase or the CPI increase (capped at 3%) thereafter.
We should note that Blackstone implemented significant operational changes and invested over $500 million into the property to renovate nearly 3,000 guestrooms, build 67 new rooms and suites, enhance the food and beverage offerings and improve the gaming amenities and common areas. Blackstone also reached agreements with unions at the property and secured approximately 3,000 stable jobs for professionals who will continue to serve guests of the hotel.
MGM Resorts CFO Jonathan Halkyard is confident they will be able to provide the best service while driving the property's growth, for which leveraging experience, operating platform and other synergies will be critical.
"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," he added.
According to MGM, The Cosmopolitan opened in December 2010 and has undergone significant capital improvements since Blackstone acquired the property in 2014.
The property has 3,032 rooms and suites that were renovated in December 2018, most of which feature a terrace overlooking the iconic Las Vegas Strip; a casino of more than 10 thousand square meters, with high-level gaming areas for VIP guests; 26 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 the best DJs from around the world; meeting space; shopping area; spa and gym.
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