VICI Properties will provide a mezzanine loan of up to $350m to aid in financing a partnership between Fontainebleau Development and Koch Real Estate Investments. The two are working to finish construction of Fontainebleau Las Vegas, which will sit at the north end of the Strip.
Fontainebleau and Koch Real Estate anticipate that the project should be open to the public sometime during 2023’s fourth quarter.
Once completed, Fontainebleau Las Vegas will contain a 67-story hotel, as well as gaming, entertainment and meeting space. The resort will occupy 25 acres and more than nine million total square feet.
Guests will have access to 550,000 square feet of convention space, 3,700 luxury hotel rooms and a wide variety of restaurants and shops.
VICI Properties Executive Vice President and CFO David Kieske commented: “We are thrilled to partner with both Fontainebleau Development and Koch Real Estate Investments, global leaders in experiential real estate development and investing, on the financing of Fontainebleau Las Vegas.
“We believe the addition of the property will contribute to the increasing vitality of the north end of the Las Vegas Strip. This transaction further strengthens VICI’s track record of creatively structuring and investing our capital to generate AFFO growth for our stockholders.”
In other company financial news, VICI and Blackstone Real Estate Income Trust recently signed a definitive agreement for the acquisition of 49.9% interest in BREIT for a total cash consideration of almost $1.27bn.
Under the terms of the deal, the properties located on the south end of the Las Vegas Strip will be subject to “an existing triple-net lease agreement” between MGM Resorts International and the joint venture. The next rental escalation is scheduled for March 1, 2023 and will bring in an annual rent total of $310m.
The companies anticipate the deal will conclude during the first quarter of 2023, pending customary closing conditions.
VICI currently owns more than half the interest in MGM Grand Las Vegas and Mandalay Bay Resort. The transaction will give the company the remaining interest in the joint venture.
