June 17, 2016
By: Daniella Soloway
Hollywood’s nightclubs are fading to black, quite literally, and according to CRE leaders, it’s not such a bad thing. Vice recently published an article on how millennials have “discovered going out sucks,” and while that may be true for some, it’s more accurate to say that tastes have shifted from one generation to the next, thereby changing what “going out” means and its supporting real estate.
After speaking with Avison Young’s John Tronson, and being a millennial in Los Angeles, it’s clear that the once highly trafficked club scene has lost its place on the top of the totem pole for weekend activities to the allure of hip restaurants, casual bar/lounges, and sometimes even just Netflix.
Tronson says, “We’ve seen the traditional night club business collapse.” From the cost of obtaining a “48 liquor license,” to the lessening of discretionary income for millennials, the costs to operate clubs are no longer worth the squeeze. Before 2008, spending $500 on a bottle of vodka was commonplace. Since the Great Recession, these businesses have not been able to bounce back, even after rebranding and renovations.
Despite the changing scene, many believe this is a welcome shift that’s necessary to create a pedestrian-friendly city and initiate smart urban planning. Clubs are businesses that don’t have to be open every night of the week and also typically open only at night, thus occupying prime real estate that cannot cater to the overall community.
With the rise of boutique hotels and intimate lobby bars like Mama’s Shelter and The Redbury, the entitlement process becomes relatively simpler, and these establishments are able to better serve the surrounding neighborhood.