Jeffrey Soffer and Brett Mufson

It’s quite the coup to turn one of the Great Recession’s worst real estate failures into a hero of recent interest rate hikes.

In the aftermath of the 2008 financial crisis, Fontainebleau Development declared bankruptcy on a 67-story resort that it was building in Las Vegas. The half-built property remained an eyesore on the Strip, tied the Miami-based developer in litigation for years, and changed hands twice until 2021. It was only then that Fontainebleau returned to Sin City and bought back the infamous development for an undisclosed amount with Koch Real Estate.   

To finish the project, the joint venture secured $2.2 billion in financing at the end of 2022. The gargantuan size of the construction loan alone was a sign of lenders’ confidence in the 9 million-square-foot project. But the financing also came after a series of interest rate hikes, which had tightened the capital markets, making the achievement all the more impressive. 

The resort is slated to open later this year, just months before Las Vegas hosts the Super Bowl. Jeffrey Soffer and Brett Mufson are reteaming with David Grutman, the king of Miami nightlife, to operate the development’s hospitality offerings. 

“This is our moment to show the world and our guests what Fontainebleau Development does best,” Mufson said in an email. 

In South Florida, the firm has remained on strong footing, despite some setbacks. It lost out on buying the oceanfront Diplomat Beach Resort to Trinity Investments, and Florida lawmakers did not change gambling laws as Soffer lobbied for. 

Yet the wins included the $170 million sellout of a condo project in Jupiter Island. And Fontainebleau’s iconic, namesake resort remains a mainstay in Miami Beach and is on track to do more group business than ever before. The oceanfront property is now undergoing an expansion to add a convention center. 

Even the closure of Story, prompted by a ban on alcohol after 2 a.m, could prove advantageous. The nightclub, which Soffer co-owns with Grutman, is in Miami Beach’s swanky South of Fifth neighborhood. In March, Fontainebleau bought the building that houses the nightclub, in a bid to perhaps lay the groundwork for a new development.