Blackstone sent a letter to its investors declaring this to be the most profitable single asset sale in the history of the firm.

Ownership of the Cosmo is being split between Stonepeak (low-tier) institutional, the Cherng family trust (family office) and Blackstone’s real estate income trust for about $4 billion.

Hotel and casino operations are being sold to MGM for $1.625 billion on a 30 year lease agreement where MGM will pay a $200 million a year in rent (increased by 2%-3% a year).

For people questioning the structure of this deal, this structure has existed for years already, even with MGM (ie the Bellagio). The Vdara and Aria will shift to this model too.

It’s notable that the Cosmo was 87% occupied from Sep 1-Sep 24 with an ADR of $448. There was also a lot of rhetoric on the future of Las Vegas/Nevada real estate. I think we can all see the soft fundamentals of that market but it really seems the big REPE funds are beginning to describe plans for a post “peak-Las Vegas” world. Interestingly enough, Apollo was rumored to be a contender in the purchase of this asset. Instead, a family office joined in a deal. Terrible signaling. LV RE has already seen a lot of sell-offs but I would not be surprised to see many more “quick” asset flips from the mega funds over the next few years.