Deutsche Bank writes down value of Cosmopolitan by $103 million

11.02.2010, Deutsche Bank AG, which foreclosed on and is completing the Cosmopolitan casino resort in Las Vegas, said Thursday it wrote down the value of the project by another 75 million euros — or $103 million.

The write-off, the second in less than a year for the project, reflects Deutsche Bank’s reduced profitability expectations for the resort that is due to open later this year on the Las Vegas Strip next to the new CityCenter complex.

“Fourth quarter 2009 net revenues reflect an impairment charge of EUR 75 million on The Cosmopolitan Resort and Casino property, which resulted from a more difficult business outlook for the hotel and casino market in Las Vegas,” Germany’s largest bank said in its quarterly earnings report.

Last April, Deutsche Bank posted an impairment charge of 500 million euros — $653 million at the time — for its Cosmopolitan investment.

The property, with a cost reported to be between $3 billion and $3.9 billion, will have some 3,000 hotel rooms.

The impairment charge is similar to non-cash write-downs other gaming companies on and off the Las Vegas Strip have taken on their properties as the recession has hurt the value of those properties.

MGM Mirage, for instance, in November slashed by 31 percent the value — on paper — of its investment in the CityCenter megaresort complex.

MGM Mirage at that time took $1.1 billion in non-cash charges against earnings to reflect reduced profit expectations for the $8.5 billion development.

Thursday’s charge for the Cosmopolitan is in line with expectations of analysts who say that because of the U.S. recession, Las Vegas will have trouble consistently filling a high percentage of its available hotel rooms until there’s a strong tourism and business travel rebound.

The latest official visitation numbers are from November and show Las Vegas had about 142,000 hotel rooms to fill that month. Those numbers do not include the 5,891 hotel and condo-hotel units at CityCenter that started to open in December.

With 2.9 million visitors in November, the city achieved an occupancy rate of 78.4 percent, off .8 of a percentage point from November 2008 and down a whopping 9.4 points from November 2006, before the recession reduced visitation to the city. Lasvegassun.com

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