A historic cafeteria-turned-nightclub in downtown Los Angeles has been sold in an off-market deal, a sign of renewed investor confidence in a stretch of Broadway that has long struggled, particularly since the start of the pandemic.
Los Angeles real estate investment firm Robhana Group bought the roughly 46,000-square-foot Clifton's building at 648-654 S. Broadway for $8.6 million, or about $186 per square foot, according to CoStar data. The seller was Andrew Meieran, who has run the colorful Clifton's club inside the building since buying the property in 2011 for about $3.6 million, according to CoStar data.
Meieran said Clifton's signed a long-term lease with the new owner and that the club would remain open. The decision to sell was directly related to the pandemic, Meieran said, as he struggled to land attractive financing to continue owning the building. Meanwhile, uneven revenue and trouble finding labor have challenged Clifton's since it reopened in February.
Owning the building "was a bigger strain on the longevity of the business than securing something much more predictable," Meieran said.
The Clifton's property wasn't formally marketed, and Meieran said he wanted to sell to Robhana Group, which owns other historic properties. A Robhana Group representative did not respond to a request to comment from CoStar News.
The former Clifton's Cafeteria opened in 1931 during the Great Depression and was billed as one of the largest public cafeterias in the world. Clifford Clinton, its founder, allowed diners to pay little or nothing for their food if they couldn't afford it.
The multilevel cafe had exotic and kitschy features including a forested dining room, neon palm trees and taxidermied animals. It served American foods and deserts such as Jell-O, meatloaf and banana cream pie, and was a favorite of science fiction author Ray Bradbury when he was struggling financially, according to several published reports.
The cafeteria closed in 2018, but a bar on-site remained open, according to the Los Angeles Times.
The sale is a hopeful sign for Broadway, which is known for its early 20th century architecture and historic movie theaters. But the stretch has endured a rocky past few decades and, despite some notable investments, has largely faded into a center for jewelry stores and low-end retail. Broadway faces another test next month as a 26,000-square-foot building at 908-910 S. Broadway with a mural from U.K. artist Banksy goes up for auction.
"People are concerned with downtown, but this instills some confidence, particularly along Broadway," said Gabe Kadosh, vice president at Colliers in Los Angeles, who was not involved in the deal.
Downtown Los Angeles, like many major U.S. city centers, has struggled to woo workers back since the start of the pandemic, which has had a negative effect on its retail market. Now, instead of trendy restaurants, chain eateries are looking for space in another sign that workers and nightlife purveyors aren't returning to the urban core at pre-pandemic levels.
Meieran said the Seventh Street corridor leading to Clifton's on Broadway was always tough to lease but was doing OK prior to the pandemic.
"The pandemic set it back a good five to 10 years," Meieran said. "But in the past three to six months it's shown some life and vibrancy."