MGM Resorts International has eyed Cosmopolitan Las Vegas for a long time. But it has finally completed the property’s acquisition process. The Cosmo is now part of the resorts’ integrated resorts.
Last September, MGM declared that it would pay $1.6 billion to Blackstone to buy Cosmo’s operating rights. Still, it stated earlier this year that it expected to seal the deal in the second quarter. The gaming firm has kept its word as this is the middle of the quarter.
This is a huge moment for the Las Vegas Strip and MGM Resorts. The Cosmopolitan Las Vegas has gradually grown to be a premier resort on the Strip due to its iconic brand, large clientele, and wonderful experiences.
Bill Hornbuckle, MGM Resorts President and CEO, stated that the resort is excited to bring the Cosmo into its world-class operations. Several investors, including the Blackstone Real Estate Income Trust (BREIT), Stonepeak Partners, and Cherng Family, paid $4 billion to acquire the company’s property assets.
MGM Resorts signed a 30-year lease agreement with the consortium with $200 million as its starting annual rate. It will rise to 2 percent annually for 15 years, after which, the annual rate will rise to 2 percent or according to the Consumer Price Index (CPI), which is capped at 3 percent. The resort will have three 10-year renewal choices after the first three decades.
The Cosmopolitan Has a High-Income Generating Potential
The Cosmopolitan’s acquisition has boosted MGM Resorts’ position on the Strip as it is among the leading operators. Besides, it will earn it more revenue.
During the last year that ended on March 31, 2022, the Cosmo generated $416 million in earnings before taxes, interest, depreciation, restructuring or rent costs (EBITDAR), and amortization on a $1.1 billion net revenue.
This shows that it has impressive margins among other reputable casino-hotels.
Reports state that the gaming venue cost Blackstone $1.74 billion in 2014 when it bought it from the Deutsche Bank. Also, the private firm spent $500 million on renovating the property, thus increasing its investment.
The Cosmopolitan has 3,033 suites and rooms that it restructured in December 2018. Its gaming floor covers 110,000 square feet.
MGM Resorts Answers Key Questions
Some Cosmopolitan members and patrons who have joined the MGM Rewards program are eager to hear when the resort will fold Identity Points, the Cosmopolitan’s loyalty platform, into its rewards program. The two programs are separate at the moment, but MGM hasn’t hinted when it will change them.
A Frequently Asked Questions (FAQs) website that the resort built to highlight Cosmopolitan’s takeover stated that a player’s status on one program doesn’t have to appear on the other one. Besides, they cannot earn or redeem one program’s points on another program.
MGM Resorts is accepting MGM Rewards, while The Cosmopolitan accepts All Identity offers. The Cosmo confirmed that players cannot accrue Identity rewards at MGM gaming venues.
Yet, its clients will still earn Marriott Bonvoy points. MGM prefers to partner with Hyatt, and it hasn’t stated if it will extend Marriott and the Cosmopolitan’s partnership in the future.
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