Blackstone Breaks Ground on Waikiki Tower

Blackstone announced this week that it had broken ground on the development of a new 418-unit vacation ownership tower at Hilton Hawaiian Village Waikiki Beach Resort, with an official ceremony that marked the construction launch of The Grand Islander by Hilton Grand Vacations Club®, slated for completion in early 2017. Blackstone Real Estate Partners VI, a Blackstone-managed fund, is providing capital for the 37-floor tower adjacent to the Tapa Tower along Kalia Road. The pricepoint of the project was not disclosed, but Blackstone did reveal that it appointed Hilton Grand Vacations, the vacation ownership division of Hilton Worldwide, to provide vacation ownership sales and marketing services, resort operations, timeshare homeowners' association management and loan servicing.

"We are thrilled to partner with Hilton Worldwide to bring a new timeshare offering to the Hilton Hawaiian Village Beach Resort," said Tyler Henritze, Senior Managing Director at Blackstone. "Combined with the quality of the Hilton Grand Vacations Club product and the Hilton brand, this destination will provide a fantastic vacation experience. We're pleased that Blackstone's investment will help create hundreds of jobs for the community, in line with our continuing commitment to Hawaii's tourism economy."

"It is our privilege to continue creating new ownership opportunities for our discerning clientele with a spectacular new Hilton Grand Vacations Club tower in Hilton Hawaiian Village," added Mark Wang, Executive Vice President, Global Sales and President, Hilton Grand Vacations for Hilton Worldwide. "This project combines the industry-leading sales, marketing and management expertise of Hilton Grand Vacations with the established development strength of Blackstone, and builds upon our history of strategic collaboration."

For more news and information visit Blumberg Capital Partners.

Blackstone Grabs Las Vegas' Cosmopolitan for $1.73B

Deutsche Bank has struck a deal to sell The Cosmopolitan of Las Vegas resort and casino to Blackstone Real Estate Partners VII for $1.7 billion, which will be paid in cash. Deutsche Bank invested $4 billion in the resort it acquired after picking up the foreclosed property following the previous owner's default on a construction loan in 2008. The sale represents one of the biggest losses on a single project that Las Vegas has ever seen. A Deutsche Bank spokesman declined to specify the loss from the Cosmopolitan in a Wall Street Journal article, but the bank has reported €6.9 billion ($9.5 billion) in losses from noncore assets since 2012.

"The bank is committed to reducing its non-core legacy positions in a capital-efficient manner which benefits shareholders," Pius Sprenger, head of the Frankfurt-based lender's non-core operations unit, said in a statement today. The division is selling and winding down assets that Deutsche Bank doesn't consider to be central to its business. The Cosmopolitan opened in December 2010, but made net losses of $440 million over its first four years of operation. Other bidders for the property included Crown and a joint venture of TPG Capital, Apollo Global Management and Caesars Entertainment, according to people familiar with the bidding process.

"As a significant investor in the hospitality sector, Blackstone recognizes the value and potential in The Cosmopolitan as well as Las Vegas itself," said Tyler Henritze, senior managing director of Blackstone's real estate group. "This marks the beginning of the next chapter for The Cosmopolitan of Las Vegas, and the thousands of dedicated CoStars (i.e. employees of the property) who are committed to providing a compelling guest experience."

Blackstone's acquisition of the Cosmopolitan "speaks to a historically smart real-estate buyer making a statement on the length of the Las Vegas Strip recovery," said J.P. Morgan casino analyst Joe Greff in a report Thursday.

For more news and information visit Blumberg Capital Partners.