The deal represents about a 28% discount from the market's peak, when the National Hotel sold in January 2007 for $415,000 per room, says Max Comess, a broker and real estate analyst with Holliday Fenoglio Fowler in Coral Gables. His office was not involved in the transaction.

The Raleigh suffered a sharp decline in room rates, which caused yearly income to fall from about $2.3 million in 2007 to less than $650,000 by April 2009, according to the property's marketing material. A decline in hotel occupancy and room rates is pressuring hotel values across South Florida.

The occupancy rate in the Miami area in August was 62.7 percent, down from 70.2 percent in August 2008, according to STR Global, a research firm. The average daily rate per room in August was $110.77, down from $126.66 a year earlier.

Brillembourg says he isn't worried about the decline in hotel revenues and plans to hold on to the property and predicts the industry will rebound in 2011. He says the key was to buy an iconic property at a time when values were falling.

"Good deals are not going to be there for long," Brillembourg says. "There is a lot of distress but very few really good properties that you can buy at a reasonable price. And this one was one of them."

"We operate in a very long-term cycle," he adds. "We are not a fund in a sense that our money is tied up for a period of time. All our investors are high net-worth individuals from Latin America that have no horizon other than when it is the best time to maximize our [investment.]"

Brillembourg, who says his company has another high-end hotel under contract in South Florida that he would not identify, says Brilla Group focuses on luxury beachfront hotels and resorts in the Caribbean, Mexico and Central America. The Raleigh is the company's first deal in South Florida, he says.

Brilla is well capitalized and is looking to acquire more South Beach hotels, says broker Abraham Wien, who is helping Brilla scout the area for acquisitions but was not involved in this deal. "They are buying when the market is down, and the Raleigh is a great asset for their business model," says Wien, a principal with Legacy Assets Investments in Miami.

Cohen says the price is reasonable based on an estimated average nightly room rate of $285. Brillembourg says the Raleigh charges an average nightly rate of about $300 per room, similar to other top-tier hotels in Miami Beach.

Balazs bought the 69-year-old hotel for $25.5 million in 2002 and completed an extensive renovation in 2004. Balazs formerly owned and continues to operate the Standard Miami at 40 Island Ave. in Miami Beach. He sold the property for $34 million last year to an investment firm and leased it back. Balazs owns Standard hotels in New York, Los Angeles and Hollywood, CA.

Cohen says the Raleigh deal gives him hope the market may be turning: "I am getting lots of calls from seasoned hotel veterans that I wasn't getting three weeks ago," he says. "There is something going on because my phone is starting to ring."