The Blackstone Group, the globally recognized US private equity giant, acquired Crown Resorts, the leading Australian casino operator, last summer. At the time of the announcement, the price tag of the deal was a staggering AU$8.9 billion ($6.5 billion). However, despite the initial investment to acquire Crown Resorts, The Blackstone Group revealed that it has already spent hundreds of millions of dollars more to help revitalize and overhaul Crown Resorts in the upcoming years.

In a recent interview for The Australian, Blackstone’s global co-head of real estate, Kathleen McCarthy, spoke about the company’s intentions to invest further in Crown Resorts’ Melbourne property. She explained that Blackstone has already invested “hundreds of millions of dollars” in the property as it prepares to completely transform the customer experience.

According to McCarthy, the company is delighted about this investment and the exciting journey that lies ahead. She spoke about Crown’s Melbourne property, explaining that it represents an excellent location. However, McCarthy added that Crown Resorts Melbourne “needs capital investment to make it an exciting and fresh place for folks to come.”

“We have invested hundreds of millions of dollars (behind the scenes), now we get to the really exciting part, which is transforming the customer experience and what they are seeing. We remain very excited, and we are just really beginning the journey here.“

Kathleen McCarthy, global co-head of real estate at The Blackstone Group

Transforming the Experience to Attract More Visitors

When asked about other possible investments, McCarthy said that Blackstone explores additional opportunities. Still, she added that an ongoing focus for the company is the transformation of Crown. According to McCarthy, Blackstone anticipates attracting a wide range of guests at the Melbourne property, including Australians and visitors overseas. She outlined that this can be achieved through investment in new and engaging experiences, such as shopping or food outlets, that can make the property even better.

“We’re really focused on the work ahead of us at Crown and the opportunity to transform the business,“

added McCarthy

Focusing on the bigger picture, McCarthy said that Blackstone prioritizes the transformation of quality real estate. Such initiatives can help bring operational assets, boost cash flow and at the same time, elevate the experiences for the visitors, she said. Finally, McCarthy outlined that the company continues to explore different investment opportunities.

The gambling sector in Australia has seen quite a lot of turbulence lately. With local governments scrutinizing operators and ongoing changes to the established regulations, fears about overspending and gambling harm continue to rise. Yet, the changes to the gambling sector are on a government level, reaffirming the commitment of lawmakers to curb problem gambling and reduce gambling harm.

The post Blackstone Anticipates Crown Resorts Overhaul to Cost Millions appeared first on Keno Wizard.

Investment firm Blackstone Inc. is reportedly exploring offers for half of its stake in the real estate of the renowned Bellagio Hotel and Casino in Las Vegas. 

Blackstone Eyes Partial Divestment of Bellagio Stake in Real Estate Portfolio Shake-up

The Bellagio property was acquired by Blackstone in 2019 for a staggering $4.25 billion in a sale-leaseback transaction with MGM Resorts International. Under the agreement, Blackstone Real Estate Income Trust (BREIT) and MGM Resorts formed a joint venture, with BREIT holding a 95% stake and MGM Resorts holding a 5% stake. As part of the deal, MGM Resorts would continue to lease and operate the Bellagio while being responsible for all day-to-day operations and capital expenditures.

Blackstone’s decision to potentially sell 50% of its stake in the Bellagio casino comes as the firm seeks to capitalize on its real estate assets, Bloomberg reported. The company recently announced plans to divest warehouses and industrial properties for $3.1 billion to Prologis Inc., further indicating its strategy of cashing out on certain real estate positions.

Blackstone has a history of divesting its interests in Las Vegas properties. In 2021, the firm sold the renowned Cosmopolitan hotel, and in December 2022, it agreed to sell its 50% stake in the MGM Grand and Mandalay Bay resorts to Vici Properties Inc., its partner at the time. These transactions highlight Blackstone’s ongoing efforts to optimize its real estate portfolio.

Speculation Surrounds Potential Sale of Bellagio Stake as Blackstone Weighs Options

The Bellagio, located on the iconic Las Vegas Strip, is one of the city’s top-performing resorts. Despite challenges faced by other real estate sectors such as malls and office spaces, the hotel has maintained strong visitor traffic, contributing to its reputation as a premier asset in the gaming industry.

Both Blackstone and MGM Resorts have declined to comment on the matter, leaving room for further anticipation and speculation within the market. While the sale of the Bellagio stake remains under consideration, industry experts are speculating on the potential value of the property and the companies that may submit bids for its acquisition. Blackstone’s deep history and expertise in the Las Vegas real estate market, across various asset classes including office, hospitality, and residential, make it an influential player in the industry.

Notably, Blackstone has made headlines in recent years as the majority owner of Crown Resorts, an Australian-based gambling company. Last year, the investment giant acquired Crown Resorts for an impressive $6 billion, further solidifying its presence in the global hospitality and entertainment sector. The deal came amid a series of regulatory inquiries into Crown’s operations, which resulted in the company losing its license to operate a new casino in Sydney and facing potential revocation of its licenses in Melbourne and Perth. Blackstone proposed several conditions for the deal, including regulatory approval, access to Crown’s financial records, and retention of key personnel.

The post Blackstone Considers Sale of Stake in Bellagio Casino in Las Vegas appeared first on Keno Wizard.

As a result, Blackstone will be investing in what it sees as a much-needed renovation in Crown Melbourne, following the $6.5-billion acquisition of Crown Resorts last year. This was carried out amid increased pressure on the property, as it faced probes into various offenses and breaches of Australia’s gambling laws.

Blackstone Outlines Future Success of Melbourne Property

However, Blackstone president Jon Gray said that he was confident in Crown’s prospects in a recent interview with The Australian, echoing a group-wide sentiment that despite its tarnished reputation, Crown Melbourne is a shiny jewel in global gaming and hospitality.

All it needs to get back to its once-favored status is a bit of a buff. According to Gray, Crown Melbourne is one of a kind, with its scale and significance undoubtedly capable of attracting crowds from the world over.

Despite regulatory headwinds, the property remains as important in Blackstone’s global gaming and hospitality strategy as ever. He added:

Melbourne is a physical turnaround story and our objective would be to invest significant capital there and enhance the asset, which we think will be great for the community and great for tourism there as well.

Blackstone president Jon Gray

Gray said that the regulatory heat Crown was facing was not really anything that worried it as of right now. Crown recently agreed to settle a $300 million (AU$450 million) fine imposed by AUSTRAC, Australia’s financial regulator. This too has not made Blackstone any less confident in the property’s prospects.

If anything, Gray has drawn parallels to The Cosmopolitan in Las Vegas, a property that the group acquired for $1.7 billion in 2014 only to sell years later for $5.7 billion. At the time, Blackstone went in with the same confidence, seeing the potential of the famed company despite its financial troubles.

Present Challenges Should Not Dissuade Investment Zeal

Gray said that it was a combination of factors that made The Cosmopolitan sale worked the way it did, because the company found the right managers to take care of The Cosmopolitan and break away from the same practices that drove the business into the ground in the first place. Investment was also needed to refurbish the venue and Blackstone was more than happy to cough up.

Ultimately, though, Gray said that there is nothing to suggest that Crown Melbourne and Crown, in general, would lessen its appeal. Australia’s tourism industry is one of the country’s main economic drivers with cities such as Perth, Sydney and Melbourne popular destinations that people want to visit.

The post Blackstone Group Signals Confidence in Crown Melbourne Property appeared first on Keno Wizard.