Wynn Resorts (NASDAQ: WYNN) and Crown Acquisitions agreed to form a joint venture to own and operate the premier luxury retail space at Wynn Las Vegas. Crown will acquire a 49.9% interest in the venture for $472 million in gross proceeds, payable in two installments. Wynn Resorts will act as the managing member and maintain 50.1% ownership of the newly formed retail joint venture.
A third-generation New York City-based family business led by the Chera family, Crown Acquisitions has acquired and developed high profile commercial real estate assets in global gateway cities. The company has investments in a significant number of luxury properties, including, 130-137 New Bond Street, London; the Apple Store in SoHo, NYC; the retail condominiums at 666 Fifth Avenue and Fifth Avenue’s St. Regis Hotel; the retail and hotels at 6 Times Square and 170 Broadway; and the retail and offices located at Olympic Tower, including the Cartier Mansion and Versace Townhouse.
Stanley Chera and Isaac Chera Sr. founded and ran a chain of regional children’s specialty stores in urban metro areas for three generations. Shortly after opening their first stores, the Cheras began acquiring the buildings they operated out of, then the buildings nearby, and within a generation real estate had emerged as a core, competitive competency.
Under the deal, which is subject to customary closing conditions, Crown will pay Wynn the first payment of $292 million at closing, which is expected to be in 2016 or early 2017, for its 49.9% interest in a portion of Wynn Las Vegas’ owned and leased retail, representing a 4.7% capitalization rate. Wynn will receive the second fixed payment of $180 million following the completion of Wynn Plaza in 2017.
On a combined basis, Wynn expects the sale of a 49.9% interest in its retail operations to represent a capitalization-rate range of 4.5 to 5.0%. The joint venture will own approximately 88,233 square feet of existing retail space at Wynn and Encore Las Vegas plus the 72,851 square foot Wynn Plaza currently under construction at Wynn Las Vegas.
Wynn Resorts owns and operates Wynn and Encore Las Vegas, Wynn Macau and Wynn Palace, Cotai.
Wynn and Encore Las Vegas feature two luxury hotel towers with a total of 4,748 spacious hotel rooms, suites and villas, approximately 194,000 square feet of casino space, 33 food and beverage outlets featuring signature chefs, two award-winning spas, an on-site 18-hole golf course, approximately 290,000 square feet of meeting and convention space, approximately 99,000 square feet of retail space as well as two showrooms; three nightclubs a beach club and recreation and leisure facilities. A luxury retail Strip-front expansion, Wynn Plaza, is currently under construction and is scheduled to debut fall 2017.
Wynn Macau is a luxury hotel and casino resort located in the Macau Special Administrative Region of the People’s Republic of China with two luxury hotel towers with a total of 1,008 spacious rooms and suites, approximately 284,000 square feet of casino space, casual and fine dining in eight restaurants, approximately 31,000 square feet of lounge and meeting space, approximately 57,000 square feet of retail space, two opulent spas, a salon, a rotunda show and recreation and leisure facilities.
Wynn Palace is a new luxury integrated resort in Macau that opened August 22, 2016. Designed as a floral-themed destination, it boasts 1,706 exquisite rooms, suites and villas, approximately 500,000 square feet of casino space, 10 food and beverage outlets, approximately 40,000 square feet of lounge and meeting space, 105,000 square feet of designer retail, air-conditioned SkyCabs that traverse an eight-acre Performance Lake, an extensive collection of rare art, a lush spa, salon and recreation and leisure facilities.
Wynn Resorts is currently constructing Wynn Boston Harbor located in Everett, Massachusetts.
Photo: Stanley Chera, founder of Crown Acquisitions.