Brilla Group Launches First Private Equity Fund

Sep 7 2010 | 12:42pm ET

The Brilla Group, which focuses exclusively on investing in high-end beachfront hotels and resorts, recently launched its first private equity fund.

The $200 million vehicle will typically make $10 million to $30 million equity investments in luxury beachfront properties in markets including the Caribbean, South Florida, Mexico, Central America and Colombia.

"We tend to look at future loan to value scenarios of 50% of the purchase price, and we tend to joint venture with partners do this type of acquisition," said David Brillembourg, chief executive officer of the Miami-based Brilla Group, which he founded in 2007. "We could buy properties with a $120 million price tag if all those things played out."

Brillembourg added that the firm also focuses on buying properties that are below replacement cost, and that are in markets that have not been penetrated in the luxury space, such as Colombia and the other aforementioned locales.

And while the loose lending and overbuilding that pre-dated the financial crisis continues to affect all aspects of the real estate sector, Brillembourg said the Brilla Group is well positioned to benefit from dislocation in the marketplace.

"You will continue to see significant trouble in the market as properties need to restructure their capital stack from four components—people overpaying for properties, people overleveraging properties, people over building properties and people running out of time," he told FINalternatives. "Those four things are going to continue to create significant opportunities for investors in the space."

Last year, the Brilla Group spent $100 million investing in eight hotels. This year,  Brillembourg said he expects the new private equity fund to deploy a similar amount of capital, but in fewer hotels with bigger price tags.

"We have been buying bigger properties, so we will close the year having bought four," he said.

And where does Brillembourg himself go on vacation when he has the time? Two of his favorite getaways are The Raleigh Hotel in Miami Beach and the Hotel Isle de France in St. Barts—both of which are Brilla Group properties.


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