Fontainebleau Scores $2.2B Loan to Build 9M-SF Resort and Casino in Las Vegas
Sacrebleu! The Las Vegas Strip is getting another casino.
A joint venture between Fontainebleau Development and Koch Real Estate Investment has locked down the $2.2 billion needed to build its new 67-story hotel, entertainment and gaming destination in Sin City, the developers announced Friday.
At a time when financing is harder to secure than a sighting of Santa’s sleigh, luck definitely is a lady for the partnership.
JPMorgan led the construction loan for the JV to begin work on what will be known as Fontainebleau Las Vegas, which is expected to start shuffling decks in the fourth quarter of 2023, according to the developers. Other lenders in the mix include Blackstone (BX) Real Estate Debt Strategies, SMBC and Goldman Sachs (GS).
Newmark (NMRK)’s Dustin Stolly and Jordan Roeschlaub negotiated the debt on behalf of the partnership.
The financing follows a week after the Federal Reserve adopted its seventh rate hike of 2022, leaving many developers feeling discouraged about the prospects of securing construction loans.
But, Koch and Fontainebleau believe their gamble will be a Black Jack.
“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, said in a statement.
The property at 2777 South Las Vegas Boulevard, acquired by the two groups in 2021 for an undisclosed amount, is located at the northern end of the strip and spans about 25 acres and the structure will be about 9 million square feet. Fontainebleau and Koch plan to build 3,700 hotel rooms and 550,000 square feet of customizable convention and meeting space on the site.
The casino floor will be about 150,000 square feet, placing it among the largest in Las Vegas joining the likes of Mandalay Bay, the Bellagio and Aria, according to a Nevada Gaming Control Board study.
“This is a milestone for Fontainebleau Las Vegas and stands as a testament to the tremendous dedication of our team and our partners at Koch Real Estate Investments,” Fontainebleau president Brett Mufson said in a statement.
Fontainebleau, led by Jeffrey Soffer, has been most active in South Florida having recently bought a $102.3 million development site on Jupiter Island in August where a redevelopment of the current building is likely, Commercial Observer previously reported.
The firm also released plans in October to build a 50,000-square-foot event venue in Miami Beach.
And the financing isn’t the only massive deal to close at the end of the year in Las Vegas. Earlier this month, Blackstone agreed to sell its 49.9 percent stake in MGM Grand Las Vegas and Mandalay Bay hotels to Vici Properties in a deal valuing them at $5.5 billion, one of the largest casino deals in the country for 2022.
Mark Hallum can be reached at firstname.lastname@example.org.