Published On: Thu, May 15th, 2014

Deutsche Bank Sells Cosmopolitan Casino & Resort In Las Vegas To Blackstone Group For $1.7 Billion In Cash

Blackstone Real Estate Partners VII, a real estate fund managed by the Blackstone Group, has agreed to buy Nevada Property 1 LLC, the entity which owns the Cosmopolitan casino and hotel in Las Vegas.

Blackstone are buying 100% of the venture, for which they have agreed to pay US$1.7 billion in cash, subject to the usual closing conditions including approval by Nevada gaming authorities.


Deutsche Bank took over the resort only reluctantly, in January 2008, when the original developer Bruce Eichner defaulted on a massive US$760 million construction loan he had taken from the bank to build it.

The bank bit the bullet, later bought the hotel for US$1 billion and completed the resort with the help of Stephen Ross’s Related Companies, wrote off its loans, and put the casino into operation. Now after a patient period holding it within the bank’s “non-core operations unit”, a.k.a. defaulted loan work-out department, Deutsche Bank has succeeded in selling it on a going concern basis. The bank may even have recouped a good deal of its money, though the exact amount they had to put up to finish it is not disclosed.

The total investment by Eichner, as his initial equity, and then by Deutsche bank, first as their loans to Eichner, then as their purchase consideration, then to fund the completion costs after they took it on and finally to fund operating losses since it finally opened in December 2010, is reported to total some US$3.9 billion by the time it was all done. The resort is not thought to have yet turned a profit.


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