The Cosmopolitan, a $3.5 billion project comprised of two glass towers on an 8.5-acre site right on the Las Vegas Strip, was projected to have 1,000 hotel rooms, 2,000 condos, a casino and plenty of retail space - and was supposed to open in December 2009.
Deutsche Bank to Foreclose on $3.5 Billion Casino
Aug. 7 (Bloomberg) -- Deutsche Bank AG will foreclose on the $3.5 billion Cosmopolitan Resort & Casino in Las Vegas after developer Ian Bruce Eichner defaulted on a $760 million loan, two people briefed on the situation said.
Germany's biggest bank weighed selling the complex after Eichner's January default, said the people, who asked not to be named because the discussions are private. Deutsche Bank will take over the Cosmopolitan and is talking with companies including MGM Mirage and Hilton Hotels Corp. to help run its 80,000-square-foot casino, the people said.
Sagging commercial real estate prices, weighed down by record subprime defaults, forced banks to hold projects until prices rise or sell at a loss. The Frankfurt-based bank would oversee an 8.5-acre development with two high-rise towers, three wedding chapels, a sandy beach overlooking the Las Vegas Strip and a deck featuring ``European-style bathing.''
``Deutsche Bank wants to be engaged in banking, not running a casino,'' said Matthew Clark, a London-based analyst at Keefe, Bruyette & Woods. ``They've had to decide between selling the Cosmopolitan into a bad market or holding on for better times.''
Las Vegas, the heart of the U.S. gaming industry, is reeling from sluggish economic growth and soaring food and fuel costs. The city's casino revenue slid 16 percent in May, the fifth straight monthly decline, according to the Nevada Gaming Commission.
This was probably a very smart move on Deutsche Bank's part. Will CityCenter be next?