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Fontainebleau is For Sale

By Chuckmonster on Wednesday, 11th November 2015 10:51am
  » filed under Las Vegas  comments: 14


The Wall Street Journal is reporting that corporate raider/activist investor/occasional casino owner Carl Icahn has contracted with CBRE real estate to sell the mothballed Fontainebleau property.

CBRE Group said that Mr. Icahn has hired the company, which expects a sale price of about $650 million for the 22-acre and the roughly two-thirds completed hotel and casino development.

A search of CBRE's property listings yielded no results for Fontainebleau's parcel. We did find the former Castaways, Las Ramblas and other great parcels for sale.

Just yesterday the Las Vegas Sun gossip columnist Robin Leach reported that design meetings were underway for Icahn to finish and "reopen" the property.

Carl Icahn (haz cheezburger) purchased the property out of bankruptcy for a paltry $150m in 2009.

Who will buy and finish this thing? If Icahn has gone and hired a real estate agent, he's probably already shopped it around to the usual suspects. The smart ones - LVS, Wynn, MGM, Caesars, Penn etc., have been staring at this building for years. They know what it is worth, how much it will cost to complete and how much it will cost to tear down and start over (most likely option.)

Wynn made an epic blunder by not securing the New Frontier property when he had the chance. Real estate options for another Wynn Resorts property in Las Vegas are thin. I wouldn't be surprised if agents for Wynn are secretly securing the Wet & Wild parcel and preparing rough scenarios for a resort that would occupy both of those parcels.

Perhaps Leach was right? Given the timing of his announcement, it is certainly possible that Wynn nightlife dood Sean Christie spilled some off-the-record beans to Robin during their recent conversation about Intrigue. Could these purported FB design meetings be held at Wynn - with Steve, Matt, DeRuyter and Roger doing some spitballing of spreadsheets, parcel plotting and basic shapes and layout?

SLS/W hotel, Lucky Dragon, Resorts World, #&256;lon, Fontainebleau reimagined via Wynn? Here comes a neighborhood!

Big thanks to VT reader DuLac55 for the tip.

Tagged: fontainebleau   north strip   carl icahn   wynn   


Comments & Discussion:

Like I said in the comment yesterday, paid parking - this changes everything!

Good return for Icahn if he can fetch that price, a four-bagger from the bottom of the recession.

or on the bean counting front - here's some wild speculation: maybe Murren's people have tallied that billion+ in future parking dollars you proposed and decided that they have the financial room to take on a new acquisition, borrowing against Tesla/Camry/Corolla revenues.

Circus Circus wasn't included in MGM's REIT spin-out, maybe the reason was that MGM is considering buying Fontainebleu across the street, redevelop Circus Circus lands, and be the dominant player right across from the newly expanded convention centre on the Riviera site?

jimmy - interesting theory re circus circus. mgm has the festival grounds up there so I doubt they'll be adding real estate.

I can't for the new owners to demolish that tower and build something new there. I wonder if Carl Icahn will actually get his full asking price?

$650 million sounds a bit steep considering the costs to finish the resort are likely in the neighborhood of $3-4+ billion. When Icahn acquired the property, it was estimated that it would cost about $1-2 billion to finish the property. Since the furnishings were sold off and the interiors stripped of any metal that could be sold for scrap, having to replace that stuff hikes up the price not to mention materials costs have gone up in recent years as well.

I think the property will sell, but at a significantly lower price, say around $375-425 million. My prediction is that Starwood Capital ends up buying the place since there have been rumors of them eyeballing properties in Las Vegas after selling off the Riv.

>Real estate options for another Wynn Resorts property in Las Vegas are thin.

He has an entire golf course to build on if he wants to...i mean, how much money does he make off of golf anyway? Seems more feasible to build a mini city-center on that golf course. The FB site is just wayyyyy out there. SLS is soon-to-be-bankrupt mainly due to it being in the middle of nowhere. Heck, my biggest gripe about staying at Wynn is the location...just so far from everything. I think most people wouldnt even consider going even farther away from the center of the strip. And if he buys it he would have to tear it down...dont think Steve is the refix/remodel type..and that would be pricey. But i do agree he screwed up royally by not buying the New Frontier land. Im personally hoping him and elaine kiss and make up and merge Alon and Wynn into one.

MGM is excellent at tearing down buildings one floor at a time! See The Harmon as an example...

What we're really talking about here is the inevitability of Wynn buying FB and Wet 'n' Wild, tearing it down, building Wynn Palace Las Vegas, and connecting it with Wynncore via the gondola thing they're doing in Macau; aren't we?

Hmm, would The Steve really want to take another risk in Vegas right now? The stock is down, he has woes in Boston, and Wynn Palace is set to open just as the Chinese gaming market is hitting a down turn. Still The Steve is a visionary. I could see him snatching up the parcel at the right price, and sitting on it. Obviously he could be concerned about pressure from new neighbors moving in nearby. Money is cheap to borrow these days, but I think it is still a little early to declare Vegas recovered. Nope I see an outside player looking for value going after it. Who knows, maybe Ruffin wants the land for Gillies Resort.

How about it becomes a Property Brothers ‘big spender’ special. Their client is looking to own the perfect four star casino resort. They will start by touring the Mirage which has everything the buyer wants, but their max budget is only $1.3B so Drew will break the news that the owners have no interest in selling at that price. BUT he is confident that he can find them a fixer upper gem of a property that has everything the Mirage offers but within their budget, after Jonathan turns it into their dream resort through renovations. The brothers will then show them Fontainebleu, which is listed for $650mm but Drew will say fair market value is probably something like $400mm so he thinks he can bring the price down to something close to that, leaving Jonathan with a $900 million dollar renovation budget to make it into their perfect dream resort. Fly-through renderings will impress, showing how they’ll bring down some walls to make modern open-concept common spaces for entertaining, while every restaurant will feature a true Chef’s Kitchen with granite countertops and stainless steel appliances. Construction will begin promptly, and even with some unforeseen issues along the way (open concept means the buyer doesn’t want this pillar or that beam showing, so need to consult a structural engineer!), and despite unforeseen expensive finishing selections by the owners, the project will be ready for occupancy, within original budget, in 6 weeks.

As long as it isn't Glen "I don;t know what I'm doing lolololololo" Staub someone will shake loose some change and finish the place in some fasion. The tower at least is pretty nice looking for whatever that's worth.

i think Icahn will bet something for the property but maybe not what he is asking. The question will then be whhat will the new owners do with it. Would it be feasable to finish he part of the building we can see now and demolish the unfinished part that had to be covered up/ Make that the parking lot and work out a deal with the convention bureau to use it. Someone is out there that wants to own a Vegas property and buying the carcaas of FB could be a start.

Future site of the Moon resort.

I demand that all future references to Alon be published as #&256;lon

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