Real estate investment trust VICI Properties was part of one last Strip deal before 2022 ended.
The company will contribute $350 million toward a $2.2 billion construction loan package that will allow developers of the Fontainebleau resort to complete the long-stalled north Strip project.
Fontainebleau Development and Koch Real Estate Investments announced the loan package on Dec. 23. The Fontainebleau project restarted in November 2021 when the original Florida-based developer reacquired the 25-acre site nine months earlier. The project sat unfinished for 12 years after construction was halted in 2009.
“We believe the addition of the property will contribute to the increased vitality of the north end of the Las Vegas Strip,” VICI CFO David Kieske said in a statement.
VICI is the Strip’s largest landowner, controlling more than 660 acres that house a dozen properties leased to four companies – MGM Resorts International, Caesars Entertainment, Apollo Global Management and Hard Rock International.
Last year, VICI completed a $17.2 billion buyout of rival real estate investment trust MGM Growth Properties and was part of a $6.25 billion purchase of the Strip properties that were operated by Las Vegas Sands Corp. VICI also owns the 77 acres underneath The Mirage, whose operations were purchased in December by Hard Rock from MGM Resorts for almost $1.1 billion.
“VICI wraps an active 2022, which completely changed the complexion of the company, increasing its size, enhancing visibility with the investment community and upgrading portfolio quality,” JMP Securities gaming analyst Mitch Germain told investors in a Dec. 17 research note.
VICI said in its statement the Fontainebleau investment would be funded in accordance with a construction draw schedule.
Fontainebleau Las Vegas is expected to open later this year with 3,700 hotel rooms, a casino, 550,000 square feet of convention and meeting space, and a collection of dining, retail and lifestyle attractions.
Following the construction financing announcement, Fontainebleau named five executives who will oversee the day-to-day operations of the property, including former Cosmopolitan of Las Vegas Vice President Colleen Birch, who was named chief operating officer.