Giant Blackstone opted to sell Cosmopolitan in Las Vegas, with MGM Resorts taking over operations. The company will pay $1.6 billion in cash for the right to operate the property. This total, said the operator, is eight times earnings before interest, taxes, depreciation and amortization (EBITDA).

MGM will take over Cosmopolitan for 30 years, with an option to renew. The company will pay an initial rent of $200 million per year, with this total increasing between 2% and 3% per year, depending on inflation rates.

“We are proud to add Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio,” said Chief Executive and President of MGM Resorts, Bill Hornbuckle.

“The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality experiences and products, making it an ideal fit for our portfolio and furthering our vision of being the premier gaming entertainment company in the world. We look forward to welcoming Cosmopolitan guests and employees into the MGM Resorts family.”

Blackstone acquired the property in 2014, and invested US$500 million in a series of renovations and other improvements. MGM Resorts Chief Financial Officer Jonathan Halkyard said these improvements made the business particularly attractive.

“With over $500 million in capital invested to upgrade the property since 2014, Cosmopolitan offers an incredible opportunity to expand our customer base and will provide greater choice for our guests in Las Vegas,” he said.

“We believe we can leverage MGM Resorts’ expertise, operating platform and other highly achievable synergies to continue providing best-in-class service while driving property growth.”

MGM added that Cosmopolitan generated $959 million in net income and $316 million in adjusted earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) for the year ended February 29, 2020.

For the quarter ended June 30, 2021, net income was $234 million and EBITDAR was $92 million.