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\tDeutsche Bank AG (DBK) is in talks with potential buyers of its Cosmopolitan resort in Las Vegas as it tries to end a six-year, money-losing venture into casino development, people with knowledge of the matter said.<\/p>\n
\tGermany\u2019s largest bank is seeking more than $2 billion for the resort and has attracted at least four possible bidders, said one of the people, who asked not to be identified because the information isn\u2019t public. Two others said it may be valued closer to $1.5 billion. Deutsche Bank foreclosed on the property after developer Ian Bruce Eichner defaulted on a construction loan in January 2008, and has labeled it a temporary investment.<\/p>\n
\tParting with the Cosmopolitan now could make the best of an unprofitable situation. Because business has been improving \u2014 the resort\u2019s revenue rose 9.6 percent to a record $653 million last year \u2014 the property could fetch more than at any time since it opened in December 2010. The two-tower complex that opens onto the Las Vegas Strip cost more than $3.9 billion to build and has never turned a profit.<\/p>\n
\tRonald Weichert, a spokesman for Deutsche Bank in Frankfurt, declined to comment on the status of any sale.<\/p>\n
\tThe Cosmopolitan \u2014 whose marketing slogan is \u201cjust the right amount of wrong\u201d \u2014 was redesigned, financed and completed by the bank after Eichner defaulted on a $760 million loan about 27 months after the construction contractor, now Tutor Perini Corp. (TPC), broke ground on the project.<\/p>\n
\tThe lender entered the casino development business at precisely the wrong time. Amid a construction boom, Las Vegas Strip casino gambling revenue plunged during the financial crisis, and Nevada property prices collapsed.<\/p>\n
\tNet Losses<\/p>\n
\tIn November 2012, Deutsche Bank shifted the Cosmopolitan along with other \u201cprincipal investments\u201d to a newly created \u201cnon-core operations unit\u201d tasked with eventually selling them, according to filings.<\/p>\n
\tWhen Eichner broke ground in October 2005, the Cosmopolitan was slated to cost $1.8 billion and open in mid-2008, according to a press release. By the time Deutsche Bank opened the doors, the tab had soared.<\/p>\n
\tNevada Property 1, the resort\u2019s parent company and a wholly-owned subsidiary of Deutsche Bank, has a $3.5 billion loan payable to the bank, according to a regulatory filing.<\/p>\n
\tThe Cosmopolitan reported 2013 earnings before interest, taxes, depreciation and amortization of $103 million, a 56 percent increase from 2012. Still, it\u2019s posted net losses of around $100 million every year since opening.<\/p>\n
\tScenic Swimming<\/p>\n
\tBuilt on 8.7 acres between MGM Resorts International (MGM)\u2019s Bellagio and CityCenter, Cosmopolitan\u2019s 52-story towers loom over a series of swimming pools that overlook the city. The property\u2019s narrow footprint forced the builders to dig deep, hitting an aquifer that requires the casino to pump groundwater from its subterranean parking garage 24 hours a day.<\/p>\n
\tShopping, restaurants and shows at the Cosmopolitan, including at its three-story Marquee Nightclub & Dayclub, contributed more than twice as much gross revenue last year as its 110,000 square-foot casino.<\/p>\n
\tThe 2,960-room resort drew lawsuits from condominium buyers and sales agents who were offered their deposits back to walk away and allow Cosmopolitan to open as a hotel without residential units. The suits alleged mismanagement and costly design modifications, often made by Deutsche Bank executives themselves. Most of the condo purchasers have settled, and Cosmopolitan has just two remaining condo units under contract that it\u2019s seeking to resolve.<\/p>\n
Posted by:<\/strong> Dr Crapology on April 16, 2014, 6:54 pm<\/p>\n Deutsche Bank AG (DBK) is in talks with potential buyers of its Cosmopolitan resort in Las Vegas as it tries to end a six-year, money-losing venture into casino development, people with knowledge of the matter said. Germany\u2019s largest bank is…<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7262","post","type-post","status-publish","format-standard","hentry","category-latest-casino-news"],"_links":{"self":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/comments?post=7262"}],"version-history":[{"count":0,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7262\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/media?parent=7262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/categories?post=7262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/tags?post=7262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}No wonder the Cosmo can’t make money on it’s casino floor. Rose and Doc were able to snag a 2 night free room from a Vegas web site and we hardly played there and ate no meals there. The food was outrageous in price, the table games terrible, and we played else where. We probably won’t be invited back. There are much better spots to play.<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"