It is a windfall for luxury hotel, restaurant and nightclub owner SBE. The company is getting an equity infusion of $35 million from billionaire investor Thomas J. Barrack Jr.’s Colony Capital LLC. The investment should prove fortuitous for SBE, given that the hotel industry is still waiting for business to pick up pace in the wake of the recession.
The investment by Colony has led to talk that SBE will possibly conduct an initial stock sale in four year’s time. Sam Nazarian, chairman and CEO of the SBE Entertainment Group revealed that an IPO is likely between 2014 and 2015. SBE controls several properties like south Miami’s Ritz Plaza Hotel, Beverly Hills’ SLS Hotel along with Katsuya sushi restaurants and popular nightclubs MI-6 and Industry.
Following the capital infusion, Colony will have a minority stake in SBE. Barrack is hoping that the SBE Group will work on providing unique experiences to its guests, a niche area that is yet to be fully tapped by the hotel industry. In this sense, Barack expects SBE to follow in the footsteps of companies like Four Seasons Hotels Inc. and Raffles Hotels & Resorts. Colony is hopeful that SBE will be the next big name in boutique hotels.
In the meanwhile, Iran-born Nazarian is looking to purchase property for a new hotel in downtown Manhattan within the next two to three months. The SBE chairman is keen to turn SLS into a high-end boutique hotel chain. And this is just the start of big plans for SBE. With the infusion from Colony giving the necessary push, SBE is on its way to greater things.