Blackstone (NYSE: BX) today announced that Blackstone Real Estate Partners VII L.P. (“BREP”) has reached an agreement to sell The Cosmopolitan of Las Vegas (“The Cosmopolitan”) for $5.65 billion.

Since acquiring The Cosmopolitan in 2014, Blackstone, alongside a best-in-class management team, transformed the resort into the leading destination on the Las Vegas Strip. Blackstone implemented significant operational changes and invested over $500 million into the property to renovate nearly 3,000 guest rooms, build 67 new rooms and suites, enhance the food and beverage offerings and dramatically 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 that will continue to serve guests of the hotel. As a result of these enhancements, The Cosmopolitan’s recent performance has been stronger than ever, exceeding pre-COVID levels in the second quarter of 2021.

Tyler Henritze, Head of Acquisitions Americas for Blackstone Real Estate, said: “This transaction underscores Blackstone’s ability to acquire and transform large, complex assets. As owners of The Cosmopolitan, we invested strategic capital and brought our expertise and experience in the lodging space to create the most dynamic destination on the Las Vegas Strip. The management team and employees at The Cosmopolitan, led by CEO Bill McBeath, flawlessly executed an ambitious business plan, including navigating a challenging period for the entire industry, to position the property for such a high level of success.”

Transaction Details

BREP conducted a thorough process, throughout which it considered a broad range of potential options for The Cosmopolitan and determined that separating the asset’s operations from the underlying real estate would result in an optimal outcome.

Under the agreement, MGM Resorts International intends to acquire the operations of The Cosmopolitan and sign a long-term net lease with a partnership between Cherng Family Trust, Stonepeak Partners and Blackstone Real Estate Income Trust, Inc. (“BREIT”), which will acquire The Cosmopolitan’s real estate assets.

“Stonepeak, in partnership with the Cherng Family Trust, believes this transaction represents a fantastic opportunity to invest in the underlying real estate of The Cosmopolitan of Las Vegas, a solid asset with an irreplaceable location, durable cash flows and the potential for additional upside,” said Phill Solomond, Head of Real Estate at Stonepeak.

The transaction is expected to close in early 2022, subject to regulatory approvals and other customary closing conditions.

Deutsche Bank Securities Inc. and PJT Partners served as financial advisors to BREP. Simpson Thacher & Bartlett LLP served as legal counsel to BREP.

Latham & Watkins LLP served as legal counsel to the Cherng Family Trust and Stonepeak Partners.

About Blackstone Real Estate

Blackstone is a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has $208 billion of investor capital under management. Blackstone is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, multifamily and single family housing, office, hospitality and retail. Our opportunistic funds seek to acquire undermanaged, well-located assets across the world. Blackstone’s Core+ strategy comprises open-ended funds that invest in substantially stabilized real estate assets globally and Blackstone Real Estate Income Trust, Inc. (BREIT), a non-listed REIT that invests in U.S. income-generating assets. Blackstone Real Estate also operates one of the leading global real estate debt businesses, providing comprehensive financing solutions across the capital structure and risk spectrum, including management of Blackstone Mortgage Trust (NYSE: BXMT).

About Cherng Family Trust

Founded in 2005, the Cherng Family Trust is a dynamic, single family office organization accountable for the administration, finances, investments, and charitable initiatives of Andrew & Peggy Cherng and their family. With a team of associates, the Cherng Family Trust strives to further the development and growth of its family members, its associates, its investment partners, as well as the local communities with which it is engaged.

About Stonepeak

Stonepeak is a leading alternative investment firm specializing in infrastructure and real assets with approximately $39 billion of assets under management. Through its investment in defensive, hard-asset businesses globally, Stonepeak aims to create value for its investors and portfolio companies, and to have a positive impact on the communities in which it operates. The firm provides capital, operational support, and committed partnership to sustainably grow investments in its target sectors, which include transport and logistics, communications, water, energy transition, power and renewable energy, and real estate. Stonepeak is headquartered in New York with offices in Houston, Austin and Hong Kong. For more information, please visit www.stonepeakpartners.com.

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