Colony Capital takes minority stake in SBE

LOS ANGELES Investment firm Colony Capital LLC has invested US$35 million for a minority stake in nightclub and boutique hotel operator SBE.

The investment will help SBE grow its SLS Hotels brand and its burgeoning restaurant brand, Katsuya by Starck. The company is looking to expand both its hotel and restaurant management platforms through acquisitions of existing assets and brands.

Expansion will focus initially on the U.S. East Coast and Europe.

As part of the agreement, Colony Capital founder and CEO Thomas Barrack Jr. and principal Richard Nanula will sit on SBE’s board of directors in key advisory positions. SBE’s founder and CEO, Sam Nazarian, will continue his role as chairman of the board of directors.

“This is a game-changing partnership for SBE and one that has us poised for powerful growth on a global scale,” Nazarian says. “Colony Capital’s expertise in the real estate and hospitality space is second to none. I have the utmost respect for Tom and have long admired his perspective and unrivaled investment savvy. Having his support, and that of Colony Capital, positions us very well for a successful expansion into new markets.”

Along with its flagship SLS Hotel at Beverly Hills, SBE owns and operates The Redbury in Los Angeles, Four Points by Sheraton Los Angeles International Airport and Sahara Hotel & Casino Las Vegas. SLS Hotel at Miami Beach is scheduled to open in 2012.

“Sam has harnessed his vision and uncanny instincts to create the most relevant emerging hospitality management company in the industry today,” Barrack says. “Having established a thriving platform of hotel and food and beverage assets, now is the optimal time to grow SBE reach and portfolio of brands.”