Investors in the casino industry often pay exorbitant amounts of money to own resorts along the iconic Las Vegas Strip, hoping to cash in on the lucrative returns that these properties can bring. However, not every real estate deal in this bustling corridor unfolds as planned. Here, we take a closer look at three high-priced sales on Las Vegas Boulevard that ultimately did not fulfill their potential.
Fontainebleau (2017)
In 2017, developer Steve Witkoff made headlines when he acquired the Fontainebleau for $600 million, sparking optimism that the long-delayed project would finally come to fruition. Despite this initial excitement, Witkoff and his partners did not end up opening the property themselves.
After purchasing the unfinished hotel-casino, they rebranded it as Drew Las Vegas and announced plans for it to feature two Marriott brands with a projected opening date in late 2020. However, due to various setbacks, including delays in obtaining a necessary construction loan, the opening date was pushed back to 2022. Then, in early 2020, construction was halted as Las Vegas grappled with the impacts of the COVID-19 pandemic, leading to liens and legal disputes.
Facing mounting challenges, Witkoff eventually sold the Fontainebleau to its original developer, Jeffrey Soffer, and Koch Inc.’s real estate division for $350 million in 2021. The deal was completed through a “deed in lieu of foreclosure,” as indicated by property records. Soffer, who initially launched the project in 2007 before it went bankrupt in 2009, took over construction and successfully opened the 67-story luxury resort the following year.
New Frontier (2007)
Back in 2007, casino mogul Phil Ruffin parted ways with the iconic New Frontier property in a deal worth a reported $1.24 billion to Israeli investors, who decided to demolish the existing structure that same year. Unfortunately, amid the collapse of Las Vegas’ real estate market and the onset of a severe economic downturn, the ambitious redevelopment plans for the site never materialized.
