Thomas Barrack Jr.’s Colony Capital LLC has paid $35 million for a minority stake in Sam Nazarian’s boutique hotel and nightclub company SBE LLC, the companies said Wednesday.
Santa Monica-based Colony Capital, which most recently has been buying up distressed assets, is investing in a successful Los Angeles company with a reputation for turning hotels, nightclubs and restaurants into hot spots on both coasts. More recently, SBE leveraged its expertise in real estate and hospitality into a new consulting business called SBE Reserve.
SBE properties include the Katsuya nightclub chain, SLS Hotels, Redbury Hotels, The Bazaar by José Andrés, Cleo, Abbey Food and Bar, and Hyde Lounge brands. Other brands include Gladstone’s Malibu, XIV by Michael Mina, The Colony, Industry, MI-6, the Sahara Las Vegas, Four Points Sheraton LAX and Ciel Spa.
“This is a game changing partnership for SBE and one that has us poised for powerful growth on a global scale,” Nazarian said in a statement. “Having (Barrack’s) support, and that of Colony Capital, positions us very well for a successful expansion into new markets.”
Colony does have investments in the hospitality sector including the luxury-hotel brand Fairmont Raffles Hotels International; Motel 6 and Sofitel brand owner Accor SA, and Atlantis resort owner Kerzner International.
Under the deal, Barrack, Colony’s founder and chief executive, and principal Richard Nanula will join SBE’s board of directors. Nazarian, SBE’s CEO, will continue as chairman. His brother, David Nazarian, president of Nazarian Enterprises, also has been named to the SBE board.
“Sam has harnessed his vision and uncanny instincts to create the most relevant emerging hospitality management company in the industry today,” Barrack said in a statement. “Having established a thriving platform of hotel and food and beverage assets, now is the optimal time to grow SBE’s reach and portfolio of brands.”