MGM Resorts is to acquire the operations of The Cosmopolitan of Las Vegas, it was announced yesterday.
The deal, said to offer “synergies and strategic value” for MGM, is worth $1.625bn in cash and is the equivalent of eight times the adjusted EBITDA of The Cosmopolitan.
After closure, MGM will enter into a 30-year lease agreement with three 10-year renewal options, with a partnership among Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust to acquire The Cosmopolitan assets. There will be an initial annual rent of $200m paid by MGM.
It will add The Cosmopolitan’s resort and casino to the MGM portfolio. The venue has had over $500m of capital invested in upgrades since 2014. Up to February 29, 2020, The Cosmopolitan generated $959m in net revenue, prior to the pandemic.
The Cosmopolitan has just over 3,000 rooms, a 110,000sq.ft casino, 26 F&B outlets, a 3,200-seat theatre, a Marquee night club, 243,000sq.ft of meeting space, 21,000sq.ft of leased retail space and 40,000sq.ft of spa and fitness facilities.