Blackstone Makes Record Profits from Las Vegas Hotel and Casino Sales

US$5.65 billion business represents about 10 times the amount invested in 2014; buyers are MGM and a group of institutional investors.

Blackstone, one of the world’s largest private equity and investment groups, has reached an agreement to sell The Cosmopolitan hotel and casino in Las Vegas to MGM Resorts International and an investor pool for $5.65 billion (about 30 billion reais).

It is the most profitable business in Blackstone’s history: profit should reach 4.1 billion dollars, equivalent to about 10 times the amount originally invested, according to a letter to investors obtained by The Wall Street Journal.

Blackstone, founded in 1985 by Stephen Schwarzman, who is the group’s CEO, has about $685 billion in assets under management.

The Cosmopolitan is one of Las Vegas’ newest casino hotel complexes, having opened in November 2010 by Deutsche Bank, which it had taken over after default by developer Ian Bruce Eichner. Blackstone acquired The Cosmopolitan from the German bank in 2014.

Blackstone, one of the world’s largest private equity and investment groups, has reached an agreement to sell The Cosmopolitan hotel and casino in Las Vegas to MGM Resorts International and an investor pool for $5.65 billion (about 30 billion reais).

It is the most profitable business in Blackstone’s history: profit should reach 4.1 billion dollars, equivalent to about 10 times the amount originally invested, according to a letter to investors obtained by The Wall Street Journal.

Blackstone, founded in 1985 by Stephen Schwarzman, who is the group’s CEO, has about $685 billion in assets under management.

The Cosmopolitan is one of Las Vegas’ newest casino hotel complexes, having opened in November 2010 by Deutsche Bank, which it had taken over after default by developer Ian Bruce Eichner. Blackstone acquired The Cosmopolitan from the German bank in 2014.

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The newly settled deal segregates casino and hotel ownership from operating rights. These were acquired for $1.6 billion by MGM, which has its own businesses in the city known as the gambling capital.

A partnership that includes Blackstone’s real estate arm acquired the hotel and casino for $4 billion. Other investors are Stonepeak Partners, an infrastructure specialist group, Cherng Family Trust, a Las Vegas family office, and Panda Restaurant Group.

The Blackstone sale represents yet another example of a trend in Las Vegas business: the sale of properties so that groups can focus on the business of operating casinos and hotels.

In August, MGM sold its real estate division, MGM Growth Properties, to Vici Properties for $17.2 billion.

Despite the pandemic and crisis in many segments of tourism, business in Las Vegas quickly recovered: in July, more than 3.3 million people visited the city, equivalent to 90% of the same month in 2019.

In Brazil, for some years there has been a wing of parliamentarians that has sought to legalize the activity of casinos and games of chance, under the allegation that it can generate income and jobs for the country. Earlier this month, the president of the Chamber, Arthur Lira, created a working group to debate the issue.

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US$5.65 billion business represents about 10 times the amount invested in 2014; buyers are MGM and a group of institutional investors.

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