Billionaire investor Carl Icahn has sold the stalled Las Vegas Fontainebleau casino resort to an investor group led by New York-based developer Steven Witkoff.
The $600 million deal will yield a profit of over $450 million to Icahn and his investors. Icahn recently sold the Trump Taj Mahal in Atlantic City to Hard Rock International for an undisclosed amount.
His firm still owns the Tropicana casino in Atlantic City.
In a statement Carl Icahn said
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.
Construction of the Fountainebleau Las Vegas was stalled after its developers filed for bankruptcy in 2009 during the recession as the Las Vegas casino market crashed. Icahn brought the project out of bankruptcy for $148 million in February 2010. He has been trying to sell it for over two years and was reportedly seeking a price of $650 million.
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He pointed out that it was located near the Las Vegas Convention Center which was undergoing an expansion worth $1.4 billion. He highlighted the fact that his investor group was acquiring a great and well-designed resort at a significant discount with respect to similar casino properties on the Strip. Witkoff is a well-known real estate developer with several high rise projects in New York City including the 150 Charles St., a high rise luxury complex for celebrity residents in the West Village.
The deal comes against a backdrop of a strengthening in the Las Vegas casino market. According to data from the Nevada Gaming Control Board, last year was the first time that Nevada casinos showed a net income instead of a loss since 2007 when the recession began. Las Vegas Strip saw total revenue of $17.1 billion, out of which gaming revenue was $5.86 billion, up by 0.2 percent over the previous year. Total revenue for downtown Las Vegas showed higher growth with a 6.1 percent increase over the previous year to reach $1.1 billion. Gaming revenue was at $549.6 million.