Those of us who read the daily paper and watch
TV are intimately familiar with the weekly news stories about youthful computer wizards
who claim overnight fame and fortune with Internet based ideas. This new breed of
entrepreneur lose their "paper" net worth very often over night as quickly as
they make it as new ideas supercede their innovations.
It is not
often that you read of a real estate phenomenon, an entrepreneur who has somehow
"unlocked" the secret of putting together deals and significant net worth with
the simplest business in the world the purchase and sale of real estate. It does
not take much education or intellect to understand the rules that govern making money in
real estate buy low, sell high; however, the number of individuals that succeed in
the business at the highest level (several hundred million dollars) can be counted only on
one hand. Luke Brugnara is one of these unique phenomenons who has literally gone from a
negligible net worth to a net worth of over a quarter of a billion dollars in less than
seven years without the use of any partners.
began his real estate career in 1988, two months after he graduated from San Diego State
University with a BA in Communications. He began working at a private mortgage banking
firm where he learned the idiosyncrasies of commercial real estate finance. As he assisted
others in obtaining finances for proposed real estate deals, it became readily apparent to
Brug-nara that the key ingredients to a successful real estate maker were to 1) have a
very good deal, and 2) have the guts to move on the deal immediately without hesitation.
He continued to watch moderately successful real estate players engage this simple
philosophy with remarkable results. Brugnara soon learned that money is always available
for a good deal. The key is to find that deal before anyone else and make the purchase by
tying up the property with cash to enable yourself to close the deal.
patiently waited for that first deal which came three and one-half years later in 1992
when Brugnara was able to purchase a $12.5 million first TD on a property in downtown San
Francisco through bankruptcy court from American Savings for only $1.5 million. Brugnara
was able to get such a great deal on the property because the lender was going to write
the deficiency as bad debt and needed the property off their books; they had been party to
the bankruptcy for over four years and spent nearly $800,000 in out-of-pocket additional
the property was literally handed to Brugnara for this negligible price.
Brug-nara immediately took out a $3 million mortgage on the property and used the extra
money to make four additional purchases of distressed commercial real estate in 1993.
These four purchases were eventually sold less than six years later for over $30 million
in profit as this capital seeded larger purchases for Brugnara.
Soon all of
San Francisco took notice of Brugnaras real estate conquests and began referring to
him as "Lucky Luke" as he had made a significant fortune in one of the hottest
real estate markets in the country (San Francisco) right under the noses of some of the
most experienced real estate investors in the country. Lucky Luke was praised for his
ability to make decisions to purchase real estate right on the spot and often made
deposits on his purchases within hours of hearing of properties for sale from his tight
knit group of brokers.
Brugnara closed on each and every deal which he entered into contract and because his
meteoric rise to power and wealth in downtown San Francisco nearly happened overnight and
took the business community by surprise, Brugnara has earned a reputation as an
aggressive, maverick real estate deal maker who is batting 1000% and is very much the
person to watch.
Luke Brugnara, real estate tycoon
With over one
million square feet purchased during 1993-1998, Brugnara became the largest 100% fee owner
of real estate in downtown San Francisco. His business strategy of not having partners was
instrumental in his massive accumulation of wealth as the property values in San Francisco
rose 440% over the last five years.
entered the Las Vegas market in early 1999 looking to purchase The Desert Inn at the
advice of one of his longtime broker/advisors, George Connor, Senior Vice President of
Colliers International. Connor recommended that Brugnara purchase this prime site because
of its proximity to the Convention Center and its landmass. Brugnara was able to strike a
deal with Barry Sternlitch of Starwood Hotels and Resorts Worldwide to sell him the parcel
for $295 million with Brugnara putting down $80 million and Starwood carrying a note for
$215 million. The only contingency was that if Starwood received an all cash offer
Brugnara could be "bumped" out of position. This in fact did occur as Starwood
received an all cash offer from Sun International, and later Steve Wynn, thus Brugnara had
to seek his foray onto the Strip elsewhere.
produced the Silver City Casino and Las Vegas Shopping Plaza as an alternative for
Brugnara. Situated at one of the key intersections of the Strip (at Convention Center
Drive), this site was one of only 14 corners on the infamous Strip and a very strategic
location. Connor orchestrated an overnight deal, which bound the distressed owners of the
site to sell to Brugnara for approximately $40 million. Connor also managed to bring in
Walgreens to occupy a store in the center, which is the highest rent paid by Walgreens in
the world for a term of 50 years; the value of the lease alone was $108 million! Brugnara
simultaneously closed the Walgreens lease and the property November 1999.
commissioned Tony Marnell, one of the most experienced architects/contractors in Las Vegas
(Bellagio, Mirage, Treasure Island, Rio, New York-New York) to bring to the Strip at this
prime corner location a 3,000 room mega-resort casino. This new resort will lay claim as
the crown jewel of the north end of the Strip as evidenced by Marnells attention to
perfection and detail. Brugnara has secured financing for the project, which will center
around the theme of San Francisco. Additionally, Brugnara intends on developing one or
more of the additional north end Strip sites with Marnells unique concepts which are
being kept top-secret at this time.
on the mega-resort is 24-28 months from licensure by the State of Nevada Gaming
Commission. Brugnaras license is scheduled to be heard in about one month. Silver
City will be kept open during the construction of the resort as planned by Marnell. Only
during the final phase will it be closed down to allow for the final phase of construction
before the Grand Opening in early 2003.
Brugnaras past is any indication of his future, you can certainly expect over the
next five years that the north end of the Strip will be transformed into a spectacular
entertainment and gaming wonderland that is on par with the other current Strip super