Iconic Nate 'n Al Deli Building Goes on the Block in Beverly Hills

The retail building housing the iconic Nate 'n Al Delicatessen in Beverly Hills, California, has been put up for sale for the first time in almost 75 years ahead of plans by the restaurant’s new owners, including music executive Irving Azoff, to relocate the business to another spot in the same upscale neighborhood after celebrity customers rallied to prevent its closing.

Brokerage CBRE Group is marketing the 5,800-square-foot retail building without the deli business at 414 N. Beverly Drive for an asking price of $33 million. At that asking price, the per-square-foot sale price would be just under $5,690, above the per-square-foot average price of $5,285 of the 15 retail properties that traded hands in the city in the past year, according to CoStar. That's more than 11 times the average Los Angeles metro area retail sale price of $466 per square foot.

Brokers said they have already received high interest in the property, which sits between an outpost of Lucky Brand jeans and clothing store as well as high-end fashion boutique called Alice and Olivia. It is located not far from the famed retail hub Rodeo Drive and expected to garner multiple bids in a city that houses among the nation’s richest households.

“We’ve received a lot of calls so far,” Sean Heitzler, an associate broker with CBRE Group, told CoStar News. “It ranges from people who already own buildings on that street, to institutional investors who have been in the market for a while.”

Nate 'n Al Delicatessen was opened in 1945 by Al Mendelson and Nate Rimer, and over the years has attracted a crowd of celebrity regulars including Larry King, model Cindy Crawford and nightclub mogul Rande Gerber. Many of those famous customers rallied late last year to save the deli after reports surfaced that it was being placed up for sale by current owners Mark and David Mendelson, grandsons of the deli’s co-founder, who retain ownership of the building.

Various combinations of potential celebrity buyers for the deli business were reported in news articles after that announcement. According to the news website LAist and local newspaper Beverly Press, the deli but not the building was purchased in May by Circus Clowns LLC, a company backed by Azoff and his wife, Shelli. The Azoffs also bought popular burger restaurant the Apple Pan in West Los Angeles this year.

The deli's new owners are reportedly looking to relocate the famous restaurant to a spot on nearby North Canon Drive that once housed Wolfgang's Steakhouse.

Nate 'n Al’s is among a slew of old-style delicatessens – many founded a century ago by Jewish immigrants in major cities such as Los Angeles, New York and Chicago – best known for indulgences like cheesecake, matzoh ball soup and oversized pastrami sandwiches. But the delis have largely been closing, relocating and downsizing as rents rise and younger consumers move more toward health-conscious foods.

In New York City, the stalwart Carnegie Deli and Stage Deli have been among the recent closings. In Los Angeles, the building housing the famous Langer’s Delicatessan-Restaurant, a local culinary institution since 1947, was placed up for sale in September 2018.

Heitzler, who is marketing the Nate 'n Al’s building with CBRE’s Philip Voorhees and Eric Shain, said there are several possibilities for the Beverly Drive building’s future. The current 5,800-square-foot size makes it most apt for a restaurant, though it might also be split into up to three smaller spaces to house retail stores or other commercial businesses. Established permits also allow for the single-story building to be potentially renovated to form a two- or three-story configuration.

In its offering memorandum, CBRE touts the neighborhood’s high visitor count – 7.75 million international visitors stopped by Beverly Hills in 2018 – and an average household income of $169,000, which is triple the national average. CoStar data shows the average monthly retail asking rent in Beverly Hills is $8.07 per square foot, far above the Los Angeles metro area average of $2.75.

CoStar numbers show Beverly Hills’ retail property investment activity during the past year totaled $472 million, up 111% over the prior year. The average deal price was $78.1 million, and the biggest sale of the past year was the $245 million deal involving 468 N. Rodeo Drive in September 2018, the second-biggest retail deal ever in Beverly Hills according to CoStar data.

CoStar records show the biggest Beverly Hills retail deal was the $275 million sale of 202-270 N. Rodeo Drive in August 2007.