AIDS Healthcare Foundation buys Barclay Hotel in DTLA

The AIDS Healthcare Foundation is converting one of Downtown Los Angeles’ most historic residence hotels into housing for homeless individuals.

Through a Los Angeles-based housing foundation, the AHF purchased the 155-unit Barclay Hotel in a sale that closed this week on undisclosed terms, according to a Friday announcement.

The hotel was previously owned by a limited liability company linked to prominent Downtown real estate investor Michael Delijani, records show. Delijani and his family own a number of properties in the area, including the Los Angeles Theatre at 615 South Broadway.

Delijani did not immediately respond to a request for comment.

He has served in the past as chairman of the board of the Historic Core Business Improvement District, a property owners’ group with a territory that includes the Barclay Hotel, and remains a board member.

Delijani bought the hotel in 2018 for $21 million — about half of what it was listed for in 2016.

The Barclay is currently an affordable residence hotel, with 155 units and relatively low rents, likely in the hundreds of dollars per month for some longtime residents. It has retained that status as Downtown L.A. redeveloped around the establishment at the corner of 4th and Main streets. That’s where developer Tom Gilmore touched off the “Downtown Renaissance” two decades ago with the conversion of an old office building across the street into market-rate residential lofts, launching what became known as the “Old Bank District.”

AHF’s plans call for a renovation that’s expected to spruce up the Barclay Hotel and add three rooms. Monthly rents are expected to fall from the affordable range to extremely low, which can amount to a percentage of a tenants’ income rather than a generally set rate.

Since 2017, the AHF has bought 10 other hotels totaling over 1,000 units with the goal of turning them into housing for extremely low-income tenants.

AHF is one of a number of nonprofits, developers and private equity funds that have looked to build supportive housing and units reserved for extremely low-income tenants as Los Angeles grapples with a deepening crisis of homelessness.

This week, SDS Capital Group announced it raised a $150 million fund to finance permanent housing with supportive services for the homeless, with 1,800 units slated to be in Los Angeles County. Kaiser Permanente led the funding round with $50 million.