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Investors Buy Stalled Vegas Resort for $600M
New York-based Witkoff and New Valley LLC, a Miami-based investment company owned by Vector Group, acquired the former Fontainebleau resort hotel in Las Vegas from Carl Icahn’s New York-based Icahn Enterprises for $600 million. The investors believe the partially-built property, located at 2755 Las Vegas Blvd. South, is significantly undervalued, and has identified numerous ways to unlock the significant underlying value of the property to generate strong returns.
Witkoff’s Steve Witkoff says, “At the basis, we acquired a well-designed, structurally sound integrated resort at a significant discount to both replacement cost and the implied public market valuations of comparable Las Vegas Strip resorts.”
Originally envisioned as a $2.8-billion, 3,815-room project on 24.5 acres, plans for the Fontainebleau included 24 restaurants and lounges, a 60,000-square-foot spa, a 3,300-seat performance hall, a retail center and a 95,000-square-foot casino. Construction commenced in 2007, but stalled when the project went bankrupt in 2009.
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