Fontainebleau Resort Sold for Huge Profit after 7 YearsAugust 31, 2017 10:55 am
Construction on the $2.9 billion Fontainebleau Resort Las Vegas was halted after just two years in 2009 when the development went into bankruptcy. The following year, Icahn Enterprises L.P. subsequently snapped up the property for $148 million, and having sat on it all this time, the firm has now agreed to sell it on to investment companies The Witkoff Group LLC and New Valley LLC for a $600 million price tag.
Commenting upon its sale, and the tidy profit made by the business., Carl Icahn stated that the Fontainebleau represented “one of Icahn Enterprise’s hidden gems,” and that the property was acquired at a time when other companies showed a unwillingness to invest. Elaborating further, Icahn explained:
“This successful investment is an example of our ‘contrarian’ modus operandi, which seeks to invest in undervalued assets and businesses, nurture, guide and improve their condition and operations, and ultimately sell them for large gains.”
In addition to the gaming industry, the range of industries that fall within the scope of Icahn Enterprises includes everything from automotive, energy, metals, and mining, to real estate and food packaging.
In the meantime, Witkoff seems equally as pleased to add the Fontainebleau Resort to its portfolio, especially as Nevada is now recovering from the downturn it experienced in recent years. Describing the property as “one of the best physical assets in the country,” a statement from the firm said that the structurally sound integrated resort was purchased at a “significant discount to both replacement cost and the implied public market valuations of comparable Las Vegas Strip resorts”. Adding further to its value is the fact the Fontainebleau is situated close to the Las Vegas Convention Center, which is presently undergoing a massive renovations to the tune of $1.4 billion, and looking ahead, Witkoff stated:
“We look forward to applying our industry-leading value-enhancing platform to this property to unlock its true growth potential.”