Fontainebleau Las Vegas is Finally Sold, Source Says Official Announcement Imminent

We have the best sources, ever, and our inside guy has confirmed the abandoned Fontainebleau Las Vegas has finally been sold.

Note: Our story was officially confirmed on Aug. 29, 2017. Fontainebleau was sold for $600 million. See below for more.

After months of repeated false rumors about the sale, we hear an official announcement of the Fontainebleau sale is expected soon.

Not “within 60 days” soon this time, but actually soon. Several days from now soon. Oh, just go with it.

Our source claims the purchase is a done deal, and the parties involved are “finalizing the financing package and operational details.”

Information about the buyer is light on details, but signs point to the buyer being a “sizable Eastern real estate investment company.” Our source adds the buyer is also “very politically connected.”

Fontainebleau wrap

Yeah, the wrap doesn’t help so much.

Carl Icahn is the current owner of Fontainebleau (pronounced “fountain blue”).

Icahn purchased the bankrupt project in January 2010 for $150 million. The bajillionaire was looking to sell it for $650 million, and he may just have gotten his asking price.

Fontainebleau Las Vegas was previously listed by a Las Vegas-cased commercial real estate firm, CBRE Las Vegas, but that’s no longer the case, according to a company rep.

Bolstering the rumor Fontainebleau has been sold, CBRE says the company submitted the property to “the purported buyer” during their listing, “but he wasn’t in the market at that time.”

Recent buzz about Fontainebleau has centered mainly around the building getting a wrap to help cover up its hulking awfulness. The sale of Fontainebleau Las Vegas sets the stage for the buyer to complete the project and pump some new life into the north end of The Strip.

Fontainebleau

We pretty much do stories about Fontainebleau just to share this photo we made.

There have been other intriguing rumors associated with the sale of Fontainebleau Las Vegas as well.

Our friend on Twitter, Adam S., shares that the fate of Fontainebleau could be intertwined with that of SLS Las Vegas. The SLS was recently sold, and it’s believed the new owners of SLS could buy out the existing Starwood/Marriott deal to take back control of its luxury tower, currently branded as W Las Vegas.

That scenario could position Starwood/Marriott to be involved with Fontainebleau.

When we floated the idea the buyer could be Barry Sternlicht and his Starwood Capital Group, a key source said “no,” but suggested it’s another “New York buyer.”

No matter how things unfold, it’s a great relief to hear there’s finally some movement at Fontainebleau Las Vegas.

Downtown Grand

Fun fact. These escalators at Downtown Grand were purchased for a song when Fontainebleau tanked.

It should be noted, though, not everyone will be thrilled with the prospect of the Fontainebleau sale.

Our tipster, an hospitality industry insider, points out many in Las Vegas resort circles feel like Las Vegas doesn’t need an influx of room, convention, restaurant and nightclub inventory.

After the sale, even MGM Resorts CEO Jim Murren says it’ll be between two-and-a-half and three years before the Fountainebleau could open.

Thankfully, as a blog, we need not be concerned with things like ADRs (average daily rates). We’re excited The Strip may soon rid itself of an eyesore, and we may very well get a shiny new resort wherein we can eat, drink and cavort.

If rumors of a sale are true, our hope is Fontainebleau Las Vegas will soon play host to a metric hell-ton of cavorts.

Updated (8/29/17): Our story has been confirmed by multiple media outlets. Fontainebleau has been sold for $600 million to two real estate investment firms, The Witkoff Group and New Valley. Read more.

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43 thoughts on “Fontainebleau Las Vegas is Finally Sold, Source Says Official Announcement Imminent

  1. Bouldersteve

    This is good news although purchasing it and completing it are two different things. Hopefully we won’t have another Resorts Word situation where the buyer takes years before starting work.

    Reply
    1. Steven Brown

      There’s a lot of work that has to be done, as Icahn had stripped the interiors of whatever could be sold for scrap. He made his money back on the purchase via selling scrap metal and the furnishings and decor for pennies on the dollar.

      Reply
      1. Bouldersteve

        I have heard a estimate of a billion $ to complete construction. Would be less but Icahn as you said stripped the place.

        Reply
          1. Bouldersteve

            Wow! At that price it may make sense to tear it down and start over. Never liked the design..looks like a office building

  2. Photoncounter

    I just hope they change the name to something easily pronounced.

    Fountainblow?
    Fountainblew?
    Fountainbleh?
    Fountainblah?

    If Marriott I wonder if the relationship with Cosmopolitan will continue?

    Nice to hear about potential progress!

    Reply
    1. Steven Brown

      I was surprised that when The Blackstone Group bought Cosmo, they kept the relationship with Marriott, as at the time, Blackstone was the majority owner of Hilton Worldwide, owning 45.8% of the company. Last year, they made a deal to sell most of that stake to HNA Group, a Chinese conglomerate that owns stakes in hotels via a subsidiary, HNA Hospitality Group.

      Reply
  3. JFM3

    I wonder if MGM will be the operator of the hotel? They do have their new ownership structure of hotel/resort operations and REIT/ownership. Any comment that they weren’t interested in purchasing would still be correct. I look forward to the final details of the deal.

    Reply
  4. Brian Bijan

    Please be real, please be real, please be real, please be real….

    I would love to see this thing finally finished and bring some life into that area.

    Reply
  5. Paul Farmer

    As an aside, my parents used to take my two brothers and I to Fountainbleu Miami when we were young. It was awesome. I hope the new owners make this resort just as awesome!

    Reply
  6. Craig Peet

    This part make s laugh “Our tipster, an hospitality industry insider, points out many in Las Vegas resort circles feel like Las Vegas doesn’t need an influx of room, convention, restaurant and nightclub inventory” Of course Las Vegas doesn’t need more rooms, lets keep the rates high and suck every last penny out of guests with parking & resort fee’s

    Reply
    1. Luis the Misanthrope

      Basically is it. Of course they’d say something like that if their business is booming and visitors have no better options at times.

      Reply
    2. Steven Brown

      This seems to be a recurring theme in Vegas, concerns about there being too many hotel rooms to fill. From an article in the Las Vegas Sun dated August 10, 1998 on the news that Harrah’s was buying the Rio:

      Reply
  7. Manybar Goatfish

    The $500,000 wrap that was reportedly forced on Icahn by by Clark County officials is freakishly coincidental with the sell of the entire project one month later, isn’t it? It’s not surprising the buyer is “very politically connected.” Dirty deeds done dirt cheap?

    Reply
    1. Steven Brown

      Icahn dragged his feet when it came to putting up the wrap, as it had been quite some time between being ordered to put up the wrap and installing of it.

      Reply
  8. AccessVegas

    We don’t need room inventory? My ass. And, we need more competition in the marketplace. If F-bleau and Resorts World are independents and stay that way, it will be a plus.

    Reply
  9. Luis the Misanthrope

    Don’t listen to Murren or Caesars. They only say that there would be too much inventory, yeah too much inventory to compete with.

    Reply
  10. Luis the Misanthrope

    If I were a billionaire casino owner. I’d be probably one of the most vocal owners. Calling MGM cheap skates and ruining Las Vegas and talking junk about their properties.

    Reply
    1. Manybar Goatfish

      If you were a billionaire casino owner, would you operate an independent sportsbook or sub it out to one of the chains? I’d make a really good oddsmaker if you’re ever looking to hire one. And I’ll work cheap: a couple dozen drink tickets a day will get me buy.

      Reply
      1. Luis the Misanthrope

        It depends on how they do the experience, if they have a betting app that is buggy, ugly and just plain awful to use, hell no. This hotel would cater specifically to millennials and would be split in two so that those that party aren’t roomed next to those who go to conventions. I’d dedicate an entire tower to conventioneers. I would be like the Steve Jobs of Vegas, I’m methodical and detail oriented and like things that make sense and don’t require a learning curve to use it.

        Reply
  11. Mike L

    I never understood the timeline of purchases for this project. They wasted all that cash buying furnishings and interior finishes, then Plaza and DTG bought the stuff for pennies on the dollar. Why would they purchase furnishings for thousands of rooms before the building was even finished?

    Reply
    1. TP

      If you know anything about the timeline of building a casino resort/hotel, furnishings are purchased ahead of time due to long lead times (normally luxury resorts order from over seas). Once complete floors are done they are furnished and construction continues on the floors above or below depending on the schedule that was developed.

      Reply
    2. Scott Roeben

      Yeah, a lot of things happen simultaneously with these projects. A linear timeline would be painfully long, so developers are sort of taking a leap of faith. In this case, an unfortunate, expensive one.

      Reply
    3. Steven Brown

      At the time of the bankruptcy, the property was 70% complete and they had been planning on opening in late 2009. That is until the economy tanked and Deutsche Bank, having just foreclosed on the Cosmopolitan, pulled their funding on the project (which led to other banks doing the same), which led to the bankruptcy. Steve Wynn briefly took a look at the property, and after seeing the layout of some of the completed rooms, he walked away. I seem to recall that these rooms were a bit on the small side, something around 500 square feet. So unless they can strip the interiors to the steel and make the rooms larger, it may be prudent to tear down and start anew.

      Reply
  12. Funkhouser

    If some real estate hedge fund wanted to wade back into the Las Vegas market, the timing is now. With NFL deal done and the timeline for NFL games to be played in a new LV stadium 3 years out. This is the time for the FB project to come back alive. Everyone is getting excited about the Oakland Raiders move since it will bring a bump to occupancy rates in Las Vegas. Not to mention all the other NFL supporting businesses who will be having meetings, dining, and sports related conventions. Vegas needs additional ‘good’ hotel inventory to handle projected growth.

    Reply
  13. Zipity DuDa

    Sold for a song? …Escalators sold for a song. Which song was that? How did the deal …well… “escalate” to a sale?

    Reply
  14. Rooster

    Dear Lord Baby Jesus, lying there in your little ghost manger, lookin’ at your Baby Einstein developmental videos, learnin’ ’bout shapes and colors…Please let the buyer be someone who is planning on finishing this eyesore, and not sit on it for another 10 years.

    Amen.

    Reply
  15. banchong

    I walk/drive past this almost daily and it is fascinating to see up close, just how big the property is. Fingers crossed tightly that someone finishes this soon. When walking past, I look through the gaps in the construction inside and imagine what it will look like once it’s all finished. Certainly going to liven up the whole area from SLS to Wynn !

    Personally, I love the design of the building. It’s so massive and the part right at the very top (viewing deck, bar, whatever it’s going to be) is going to have THE most spectacular views of Vegas. May even kill off the Stratosphere and let it melt into the ghetto in which it sits.

    Feel bad for Turnberry Towers residences on the side facing that big, blank parking lot wall. Can you imagine spending 100’s thousands on a luxury condo, only do overnight have it lose probably half it’s worth and be staring at a blank concrete wall.

    Reply
  16. The Vegas Voice

    And what about that big empty pit between the Sahara/SlS/w and the big blue silo?? Still a big open bit…

    Reply
  17. The Vegas Voice

    It would look great in a scrap pile in China. I’m sure the SLS would like to start selling “Strip View” rooms again and not crack alley/naked city views

    Reply
  18. William Wingo

    “Eastern Real Estate Investment Company”… Hmmm…
    I wonder if they mean “Eastern” as in “Eastern United States,” “Middle Eastern,” or even “Far Eastern”… And will the new owners move with the same speed and determination as Resorts World?
    Time will tell.

    Reply
  19. chewieb

    two questions. 1, didn’t Icahn pull this same trick with the Stratosphere in it’s days of being a stalled, mammoth property?

    2, is that “shit show” billboard real?

    Reply

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