Las Vegas Sun

March 28, 2024

MGM taking over operations of Cosmopolitan

The Strip from Above

Tom Donoghue / DonoghuePhotography.com

An aerial view of the Cosmopolitan.

MGM Resorts International is expanding its footprint on the Las Vegas Strip, announcing this morning it has agreed to purchase operations of the Cosmopolitan for $1.6 billion.

The deal calls for MGM to enter into a 30-year lease agreement, with three 10-year renewal options, according to a news release.

At the same time, the Cherng Family Trust, headed by Panda Express billionaires Andrew and Peggy Cherng; real estate investment firm Stonepeak Partners; and a Blackstone real estate fund, Real Estate Income Trust Inc. — will pay more than $4 billion to acquire the real estate assets, Blackstone said Monday.

Blackstone bought the Cosmopolitan in 2014 from Deutsche Bank for about $1.7 billion and said Monday it invested some $500 million in renovations.

MGM will pay an initial annual rent of $200 million, escalating annually at 2% for the first 15 years and the greater of 2% or the increase of the consumer price index — capped at 3% — thereafter.

"We are proud to add the Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio," MGM Resorts CEO and President Bill Hornbuckle said in a statement. MGM’s other Strip resorts include the Bellagio, Aria, Excalibur, Luxor, Mandalay Bay, MGM Grand, Mirage, New York-New York and Park MGM.

"The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world's premier gaming entertainment company,” Hornbuckle said. “We look forward to welcoming The Cosmopolitan's guests and employees to the MGM Resorts family."

The property, which opened in 2010, features 3,032 rooms and suites that were renovated in December 2018. It has an 110,000-square-foot casino; the Chelsea, a 3,200-seat theater; Marquee nightclub and dayclub; 243,000 square feet of meeting space; 21,000 square feet of leased retail space; and a 40,000-square-foot spa and fitness facility.

The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.