American private equity firm, Blackstone Group LP, has reportedly retained the services of financial services experts, PJT Partners Incorporated, and Deutsche Bank AG in order to explore the possibility of selling off The Cosmopolitan of Las Vegas.
Las Vegas legacy:
According to a Wednesday report from The Wall Street Journal newspaper, New York-headquartered, Blackstone, spent some $1.73 billion to purchase the luxury hotel and casino in 2014 before subsequently sinking another $500 million into fully completing and renovating the 8.5-acre Las Vegas Strip venue. These efforts included the addition of 18 bars and restaurants as well as the conversion of the property’s top four floors into 21 large suites aimed at international high-rollers.
Partially opened in December of 2010 by Deutsche Bank AG after the original developer suffered financial difficulties, The Cosmopolitan of Las Vegas reportedly now commands some of the highest average daily room rates in Nevada at more than $330. It moreover is being successfully run as an independent venue and has seen its annual earnings before interest, tax, depreciation and amortization almost triple to in excess of $300 million since 2014.
The Wall Street Journal reported that a plethora of prominent casino operators are likely to be interested in purchasing The Cosmopolitan including the likes of MGM Resorts International and Wynn Resorts Limited while the firm behind the under-construction Resorts World Las Vegas, Kuala Lumpur-listed Genting Malaysia Berhad, may take a punt in order to offset any perceived competition. As such, it detailed that the giant property could fetch a price of around $4 billion with any new owner being able to plug the venue directly into its existing hotel and casino systems.
The newspaper reported that Blackstone likely considering whether to offload The Cosmopolitan partially due to a recent cooling in visitation numbers. Although Las Vegas welcomed about 43 million tourists in 2016, subsequent figures have hit only around 42 million although, John DeCree, from Union Gaming declared that there are ‘a number of visitation catalysts ahead’ including the imminent move of the Oakland Raiders franchise of the National Football League (NFL) to Las Vegas.