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Blackstone keeps betting on the hospitality industry’s real estate assets while brands seek to shed them.
Deutsche Bank AG agreed to sell the Cosmopolitan of Las Vegas hotel and casino to Blackstone Group LP for $1.73 billion in cash, ending a six-year money-losing venture into casino development.
“The bank is committed to reducing its noncore legacy positions in a capital-efficient manner which benefits shareholders,” Pius Sprenger, head of the German bank’s non- core operations unit, in a statement today.
Germany’s largest bank was seeking more than $2 billion and had attracted at least four possible bidders, a person familiar with the situation said last month. The person asked not to be identified because the information isn’t public. Two others said it may be valued closer to $1.5 billion. Deutsche Bank foreclosed on the property after developer Ian Bruce Eichner defaulted on a construction loan in January 2008, and has labeled it a temporary investment.
The resort’s revenue rose 9.6 percent to a record $653 million last year. It opened in December 2010. The two-tower complex that opens onto the Las Vegas Strip cost more than $3.9 billion to build and has never turned a profit.
With assistance from Christopher Palmeri in Los Angeles and Beth Jinks in New York.
To contact the reporter on this story: Hui-yong Yu in Seattle at firstname.lastname@example.org. To contact the editors responsible for this story: Kara Wetzel at email@example.com Anthony Palazzo.