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Comprehension checkFontainebleau Las Vegas Project Secures $2.2b Loan
Fontainebleau Development and Koch Real Estate Investments, the developers of the Fontainebleau Las Vegas project located on the north end of the Las Vegas strip, have announced securing a $2.2b construction loan trough SMBC, JP Morgan, Goldman Sachs, VICI Properties, Blackstone Real Estate Debt Strategies and Guggenheim. This loan makes it possible to continue constructing the resort and finish it by the end of 2023.
The project was originally developed by Jeffrey Soffer, who started constructing the facility in 2007, but two years later had to stop the works completed on 75% because of bankruptcy caused by the Great Depression and the real estate crash. Then, the venue was sold twice — to Carl Ichan in 2010 and to Steve Witkoff in 2017. Later, Soffer partnered with Koch Real Estate Investments and managed to reacquire the 25-acre site. November of 2021 became the month when the construction of the resort restarted, and Soffer needed additional financing to complete the project as scheduled during the fourth quarter of 2023.
Jacob Francis, Per Koch Real Estate President, stated that securing $2.2 billion in financing in today’s market spoke to the widespread confidence in that project, and the team that came together to bring it to Las Vegas.
The resort will have a casino, 3,000 hotel rooms, a 550,000 square foot convention and meeting space as well as various retail, dining and other attractions. As for the casino’s gaming floor, it will be of 150,000 square feet that makes it one of the largest in Las Vegas on a par with Mandalay Bay, Bellagio and Aria.
It is worth noting that a week before the loan was approved, the US Federal Reserve had implemented its 7th rate hike this year, which made many developers doubt that getting a construction loan would be approved.
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