That only took (almost) two years. Billionaire investor Carl Icahn announced back in 2015 that he would put the Fontainebleau Las Vegas up for sale. This week, a partnership led by New York developer Steven Witkoff bought the long-abandoned resort for $600 million. Witkoff reportedly spent four months conducting its due diligence on the resort and market prior to the acquisition, and has “identified numerous ways to unlock the significant underlying value of the property to generate strong returns for its business and the Las Vegas community,” according to a statement.
Icahn Enterprises acquired the massive structure for $148 million in February 2010, just as the Great Recession was waning. The $3-billion North Strip property had been abandoned for a year at about 70 percent completion when Icahn purchased it out of bankruptcy. In 2015, CBRE, which had been tapped to market the resort, was reportedly seeking approximately $650 million for it.
In a statement, Icahn said that the deal, resulting in a gain of approximately $457 million for unit holders, is an example of the company’s “contrarian” philosophy. “[We] invest in undervalued assets and businesses, nurture, guide and improve their condition and operations, and ultimately sell them for large gains.”
“2755 Las Vegas Boulevard South is one of the best physical assets in the country, which is one of the reasons we were attracted to it,” Witkoff said in his own statement. “Furthermore, the resort is ideally located on the Las Vegas Strip, directly across from the Las Vegas Convention Center, which is in the midst of a $1.4 billion expansion and renovation. At the basis, we acquired a well-designed, structurally sound integrated resort at a significant discount to both replacement cost and the implied public market valuations of comparable Las Vegas Strip resorts.”