Saturday, May 14, 2016

Has the Fontainebleau Las Vegas become a Joke as well as an Eyesore?

Several years ago, I wrote an offer for this property.  The Japanese Buyer I represented said $450 Million was enough.  He believed -- as I do -- there was a lot more work to be done than met the eye.

When Carl bought this out of BK on 2009, that left a lot of unpaid sub-contractors who eventually had to close shops. True: That's not his fault.

(Full Disclosure: my wife's company worked on this and was owed hundreds of thousands of dollars, which was then in turn owed to other vendors for products they didn't get paid for.)

But, Carl paid $156 Million for this property and then did nothing.  Everybody knew Carl was just going to sit on this.  And the reason he sat is because: Carl is NOT a developer.  He built his reputation on being able to buy companies cheaply, then sell off parts for more money.  I say: Good for him!

But, I do believe that his acquisition of the Fontainebleau Las Vegas has become a mistake.

Yes, I wanted to list the property and was denied.  That's okay.  I can now sit and watch the unfolding of an over priced building slowly, slowly falling apart.


In the picture, I took while on the 'Strip' with out of town family just this past Friday night, the Fontainebleau Las Vegas does appear to be slowly rotting away.

The sunset gives the abandoned property a certain haze that does suggest that no one really cares about it anymore.

Anyway, I am more convinced that this property -- which I still believe is located on the wrong section of Las Vegas Blvd -- isn't worth the $500 Million Carl's CEO told me he thought it was worth three years ago.  (Then, again, Carl's CEO opinion isn't the important one.  Carl's opinion is the only one that matters.)

So, when it was surprisingly listed this past November for $650 Million, I was floored.  You got to be kidding was my response.  And, the fact that the listing broker said in a reply email to me that they weren't going to split any commission, I thought: How greedy?  (I have a copy of the email stating that they were not sharing.)

So, I am now working on other properties with other sellers/buyers and I am trying my best to convince them that the 50% completed Fontainebleau Las Vegas isn't worth pursuing.  I truly don't see the value given that Resort World and the Alon have stalled in their construction.

So sad.

Contacting David Howes is easy -- either by: davidATdavidhowesDOTnet OR call him at: 70 25 01 93 88 AND Follow David on Twitter: @DavidAHowes

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