Blackstone Group LP is exploring a sale of the Cosmopolitan hotel and casino, the rare instance of a major casino on the Las Vegas Strip coming to the market.

Deutsche Bank AG and PJT Partners Inc. have been retained to explore strategic alternatives for the property, including a sale, people familiar with the matter said. Blackstone, the New York-based investment firm, acquired the Cosmopolitan in 2014 for $1.7 billion, and it has sunk another $500 million into finishing and renovating the property.

The...