Fontainebleau Las Vegas secures $2.2B to complete construction

A partnership between Fontainebleau Development and Koch Real Estate Investments (KREI), the real estate investment arm of Koch Industries, has secured—with J.P. Morgan as administrative agent—a $2.2-billion construction loan to complete Fontainebleau Las Vegas, the 67-story hotel, gaming, meeting and entertainment destination coming to the north end of the Las Vegas Strip. The financing, which follows the two companies’ joint acquisition of the property in 2021, keeps construction on schedule for the property to debut in the fourth quarter of this year.

“This is a milestone for Fontainebleau Las Vegas and stands as a testament to the tremendous dedication of our team and our partners at Koch Real Estate Investments,” said Brett Mufson, president, Fontainebleau Development. “We are eager to bring our iconic Fontainebleau brand—timeless beauty, unparalleled service and innovative design—to the Las Vegas Strip.”

Fontainebleau Las Vegas spans 25 acres and 9 million sq. ft. on the northern end of the Las Vegas Strip directly adjacent to the Las Vegas Convention Center, and will feature approximately 3,700 luxury hotel rooms, 550,000 sq. ft. of customizable convention and meeting space and a collection of gaming, dining, retail, lifestyle and health and wellness experiences.

“We would like to thank J.P. Morgan, SMBC, Blackstone Real Estate Debt Strategies, Goldman Sachs, Guggenheim and VICI Properties for recognizing both the potential of this property and the expertise of those involved in its capitalization, design and construction,” said Jacob Francis, president, Koch Real Estate Investments. “Securing $2.2 billion in financing in today’s market speaks to the widespread confidence in this project, and the team that’s come together to bring it to Las Vegas.”

VICI Properties Inc. agreed to provide up to $350 million in mezzanine loan financing.

“We believe the addition of the property will contribute to the increasing vitality of the north end of the Las Vegas Strip,” said David Kieske, EVP/CFO, VICI Properties. “This transaction further strengthens VICI’s track record of creatively structuring and investing our capital to generate AFFO growth for our stockholders.”

The Fontainebleau Development-KREI partnership was advised by Dustin Stolly and Jordan Roeschlaub of Newmark. Upon completion, Bowtie Hospitality LLC, a subsidiary of Fontainebleau Development, will be the sole operator of Fontainebleau Las Vegas.