The sale of the Cosmopolitan of Las Vegas is one step closer to being finalized after state gambling regulators today gave initial approval of the $1.73 billion transaction.
The Gaming Control Board recommended that the Nevada Gaming Commission later grant final approval of the sale of the upscale Strip resort, which is in the process of changing hands from Germany’s Deutsche Bank to a division of the Blackstone Group.
Since opening at the end of 2010, the Cosmopolitan has yet to record an annual profit. The property has improved its financial performance this year, however — it’s trimmed losses and boosted revenue, including from the casino.
Blackstone representatives were upbeat about the property’s future when they spoke to gaming regulators in Carson City.
“This is a tremendous physical asset,” said Blackstone’s Jonathan Gray. “We are big believers about what’s happening in Las Vegas today and what’s going to happen over the next few years.”
Blackstone executives suggested to the gaming board that changes will be in store for the property once they officially take it over. Gray said Blackstone has a “very simple” business model of “buy it, fix it, sell it.”
Tyler Henritze, another Blackstone executive, said that the company is “acutely focused” on improving the casino. He said that while Blackstone likes where the Cosmopolitan stands among the broader industry focus on non-gaming revenue, they will be looking at revitalizing the casino floor.
The property opened at an inopportune time for the casino industry, not long after the financial downturn hit. Gaming board chairman A.G. Burnett said that was bad news for Deutsche Bank.
“They probably came in at the worst possible time and sold at the worst possible time, but when you look at the property and you look at its numbers …. this is a very successful location,” he said.
The issue now goes to the Gaming Commission, which meets on Dec. 18.