In a new Wall Street Journal article titled Blackstone Looks to Buck the Odds on Vegas Strip, Craig Karmin examine's the company's move to turn around the Cosmopolitan Hotel-Casino in Las Vegas. An excerpt follows:
At the Cosmopolitan of Las Vegas, the top four floors of the hotel's 52-story east tower offer some of the Strip's prime real estate. Views from the wraparound balconies stretch for miles, and ceilings soar up to 16 feet. Yet these rooms sit unfinished and have never been occupied by guests.
Now, Blackstone Group LP plans to transform that space into grand suites in hopes of attracting high rollers from around the world who have largely ignored the property's underperforming casino thus far. The New York investment firm bought the hotel and casino property for $1.73 billion in December from Deutsche Bank AG.
The makeover is part of Blackstone's vision for turning around the Cosmopolitan, which has been one of the biggest real estate busts of all time. Deutsche Bank, which took control of the property in 2008 after the original owner defaulted, spent about $4 billion on the project before unloading it.
Blackstone executives said they expect to spend up to $200 million on the property, in part by completing elements of Deutsche Bank's aborted plan. In addition to the top-floor suites, Blackstone has ideas for new VIP rooms in the casino areas and is looking to add new bars and restaurants in vacant space on the first three floors.
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