Deutsche Bank on Thursday agreed to sell the 2,995-room Cosmopolitan of Las Vegas to Blackstone Group for US$1.73 billion in cash.
Deutsche Bank foreclosed on the Cosmopolitan after developer Ian Bruce Eichner defaulted on a construction loan in January 2008, and was long rumored to sell the asset. “The bank is committed to reducing its non-core legacy positions in a capital-efficient manner which benefits shareholders,” the bank said in a statement.
A Bloomberg report said the German lender was seeking more than US$2 billion for the property, a person familiar with the situation said last month. Two others said it was valued at closer to US$1.5 billion. The price is at almost 17 times the property’s US$103.3 million in earnings before interest, taxes, depreciation and amortization.
The resort cost more than US$3.9 billion to build and hasn’t turned a profit since opening in December 2010. Business has been improving, with a 9.6% increase in revenue last year to a record US$653 million.
