MIAMI— In the hotel real-estate investment game, the difference between being a big player and a little player often depends on the size and scope of the playing field. This truism is ready to be tested by participants in Radar Fund I B.V., a new real estate fund targeting healthy, as well as, distressed lodging properties throughout much of Latin America and the Caribbean. With Lionstone Group COO Diego Lowenstein also CEO of the fund’s investment management entity Radar Management LLC, a team of professionals has been pulled together to manage fund operations, acquisition and redevelopment strategies and overall asset-management responsibilities. In terms of capital contributors to this fund, in addition to as much as 20% of the total put up by Lionstone, Lowenstein said: “We have formed a base of high-net-worth investors, mostly from Latin America. In addition, we have found commitment from multilateral agencies and hospitality management companies that will invest equity through the fund.” As presently envisioned, Radar Fund I is expected to invest up to $100 million in equity through 2005. “This will give us a total purchasing power of about $250 million once we fully leverage the properties,” Lowenstein said. “In addition to capital-raising, [we will be making]a tremendous effort to pre-negotiate terms with banks, hotel operators, casino operators, brokers, investment bankers, insurance companies, etc. We are aligning ourselves with recognized world-class and committed players to be fully prepared to make timely transactions as soon as we prompt our closing on the fund,” Lowenstein said. Mapping out the fund’s strategy, he contended: “We will be acquiring and renovating over 15 properties during our investment period. This will generate an important diversification for our investors in terms of destination and market segments. Our negotiations indicate we will be able to achieve this kind of diversification. For larger projects, we will contemplate inviting other real estate groups to co-invest with us,” Lowenstein said. In line with this, he pointed out: “We have created a two-pronged investment strategy— [to]invest in some healthy operations that will become current income-producing assets, and some distressed properties that bring great asset-appreciation potential. This will provide stability to our portfolio while permitting overall returns of over 20% to investors. “In terms of target markets,” Lowenstein added, “we are targeting the upscale and luxury; full-service and all-inclusive segments. Our target property size varies from 100 to 350 rooms; we are looking at some with good expansion opportunities. Our target region is comprised by a selective list of Caribbean islands, Costa Rica, Belize, and in Mexico, Cancun and the Riviera Maya. In the United States, we are looking to some specific underserved segments in Florida, although valuation levels are higher at this time,” he said. As for the operating viability of these targeted hotels, Lowenstein said, “part of the success of each property will depend on effectively positioning it with the right brand and management company. We are working with several leading hospitality management companies that will manage the properties… and even come in as partners to the projects.” He further maintained the fund investment-management entity “will use its expertise to asset manage, and properly monitor and supervise the property manager.” Commenting on the timing of this investment venture, Lowenstein said: “The tourism market in the Caribbean has grown steadily during the last decade, at a faster pace than the rest of the world. Demographic trends only suggest that the upscale and luxury leisure market in the region will continue to grow. Additionally, political instability in the world makes the Caribbean a safer place to visit. That being said, it is a great time to be buying,” he said. “Many properties are hurt by over-investment and the known disruptiv
