Fontainebleau gets $2.2B financing, on track to open in 2023
The developers of Fontainebleau Las Vegas, the 67-story north Strip hotel-casino, secured a $2.2 billion construction loan — assuring completion of the project by late 2023.
The financing, arranged by partners Fontainebleau Development and Koch Real Estate Investments, was announced Friday.
“We are eager to bring our iconic Fontainebleau brand — timeless beauty, unparalleled service, and innovative design — to the Las Vegas Strip,” Fontainebleau Development President Brett Mufson said in a release.
The towering resort is expected to one of the biggest Las Vegas projects set to debut in 2023, joining the 17,500-seat entertainment venue MSG Sphere at The Venetian which is due to open in the second half of 2023.
The Fontainebleau will have an estimated 3,700 rooms, 550,000 square feet of convention space and a shopping district that will span 90,000 square feet.
Once complete, Bowtie Hospitality LLC, a subsidiary of Fontainebleau Development, will be the sole operator of Fontainebleau Las Vegas, pending regulatory approval.
Big turnaround
Fontainebleau is one of the city’s biggest turnaround stories.
The property’s past has been marked with bankruptcy proceedings, halted construction, different sets of owners, national economic meltdowns, and years of guessing what might happen with the Strip’s tallest skyscraper.
Owner Jeffrey Soffer, the project’s original developer, reacquired the property last year. He initially broke ground on the project in 2007, but the real estate market soon crashed and the project went bankrupt in 2009.
Billionaire Carl Icahn acquired the unfinished resort in 2010 for about $150 million and, after leaving it largely untouched, sold it in 2017 for $600 million to developer Steve Witkoff and partners.
In early 2018, Witkoff unveiled the resort’s new name, Drew Las Vegas, later saying it would debut in 2022. But he suspended construction in March 2020 as the state temporarily shut down over the coronavirus pandemic.
In a full-circle moment, Soffer reacquired the project in February 2021 in partnership with the real estate wing of Kansas conglomerate Koch Industries.
“Securing $2.2 billion in financing in today’s market speaks to the widespread confidence in this project, and the team that’s come together to bring it to Las Vegas,” Jacob Francis, president of Koch Real Estate Investments, said in a release.
Dallas-based Koch has invested nearly $150 billion in growth and improvements projects. With a presence in more than 70 countries, Koch companies employ more than 120,000 people, with about half in the United States.
Fontainebleau Development has a diverse portfolio of properties in the hospitality, gaming, residential, retail, commercial and luxury services sectors and is no stranger to Las Vegas.
The company has built nine residential towers in Las Vegas, including Turnberry Towers and, in a partnership with MGM Resorts International, Signature.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
