Delano Hotel Sold to Company That Runs SLS, Raleigh, and Redbury Hotels
Founded by former Studio 54 co-owner Ian Schrager, Morgans Hotel Group is credited with creating the idea of boutique hotels. The company's early-'90s renovation of the Delano in South Beach cemented its status as an innovator in the industry, but as a company, Morgans has seen better days.
Schrager sold it in 2005. (He has since moved on to a partnership with Marriot International. The result was the Edition chain of hotels.) The company has been in financial trouble since 2012 and has finally agreed to sell itself to SBE Entertainment.
Like Morgans, SBE too was founded by a nightlife maven who moved into the hotel business. SBE CEO Sam Nazarian started his empire as a major owner of nightclubs in Los Angeles. His reputation for operating Hollywood hot spots once even earned him a cameo on Entourage.
Ownership of the Delano South Beach and another hotel in New York is included in the deal. Morgans also operates dozens of other hotels, including the Mondrian and the Shore Club in Miami Beach.
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SBE also owns or controls an impressive roster of hotels in the Miami area. Owned or operated properties include the SLS South Beach, the under-construction SLS Brickell Hotel & Residences, the Redbury South Beach, the Townhouse, and planned Hyde hotels in midtown Miami and Hollywood, Florida. Though now owned by Tommy Hilfiger, SBE also operates the Raleigh Hotel.
So now SBE controls a mix of some of Miami's most iconic historic hotels and exciting new brands. Not bad for a company that entered the hotel business only in 2007. In fact, SBE entered the Miami Beach market only in 2012 with the opening of the SLS South Beach.
The merger of the companies was a long time in the making. According to the Wall Street Journal, the two sides were under serious talks last year until negotiations hit a snag in November. However, the delay worked out for Nazarian and SBE. Shares of the publicly traded Morgans Group have dropped dramatically since then.
SBE agreed to pay $2.25 per share, which works out to a total equity value of $82 million.
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