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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.