MGM will pay $1.63bn in cash for the right to operate the property. This total, the operator said, is eight times the earnings before interest, tax, depreciation and amortisation (EBITDA) of the resort.
MGM will lease the property from its new owners for 30 years, with three 10-year renewal options. It will pay an initial $200m per year in rent, with this total then increasing at between 2% and 3% per year, depending on inflation rates.
“We are proud to add The Cosmopolitan, a luxury resort and casino on the Las Vegas Strip, to our portfolio,” said MGM Resorts chief executive and president Bill Hornbuckle. “The Cosmopolitan brand is recognized around the world for its unique customer base and high-quality product and experiences, making it an ideal fit with our portfolio and furthering our vision to be the world’s premier gaming entertainment company. We look forward to welcoming The Cosmopolitan’s guests and employees to the MGM Resorts family.”