Luxury hotelier Nazarian shops New York, renovates Florida, eyes Chicago
Sam Nazarian, the U.S. hospitality entrepreneur who played himself on HBO's "Entourage," plans to renovate the Ritz Plaza Hotel in Miami Beach as he shops New York for property and reworks debt on a Las Vegas casino.
Nazarian, 35, expects to spend $65 million in cash improving the Florida property and may strike a deal for his SLS Hotel brand in New York City within a year as the travel industry rebounds. He's also looking for locations in London, Chicago and Washington, he said in an Aug. 12 interview at Bloomberg's Los Angeles offices.
"Six months ago, from an investment standpoint, hotels were off the radar," Nazarian said. "During the last six to eight months, leading with New York, it's changed because people really believe we hit the bottom."
As chief executive officer of Los Angeles-based SBE, Nazarian reworked debt on the company's SLS Hotel at Beverly Hills and is negotiating on the 1,700-room Sahara Hotel & Casino in Las Vegas. The recession cut travel in 2009, with high-end hotels hit hardest in the U.S. Their revenue per available room fell 24 percent, according to Smith Travel Research Inc.
Breaking into the sector is tough in part because of established competition from brands including the Ritz-Carlton and St. Regis, said Patrick Scholes, an analyst at FBR Capital Markets in New York.
"There's a lot of chasing of luxury dollars out there," Scholes said in a telephone interview. "It's easier in New York, where people prefer boutique-y, luxury type of hotels. But outside of New York it would be much harder to get established."
Nazarian's strategy is to build SLS into a chain of high- end boutique hotels that include corporate amenities, such as ample meeting space, to attract business travelers.
Born in Tehran, he moved with his family to Los Angeles after Iran's 1979 revolution. Today he lives in the Hollywood Hills next to actor Leonardo DiCaprio and owns one of the world's most expensive automobiles: a red and black Bugatti Veyron. The 16-cylinder sports car goes from zero to 62 miles (100 kilometers) an hour in 2.5 seconds, according to the manufacturer's website. Nazarian said he paid $1.4 million for the car in 2007.
In addition to appearing on "Entourage," the HBO show that chronicles the life of a movie star and his buddies, Nazarian also worked with MTV on "The Hills," a show that sometimes features SBE properties. His Hyde Lounges are found in Hollywood and at the Staples Center sports arena in downtown Los Angeles as well as at the Mammoth Mountain ski resort in California. Other holdings include four Los Angeles-area Katsuya restaurants and the nightclubs Industry and MI-6, where Kim Kardashian appeared at a fashion show this year.