Eric Hadar loved New York’s theater and entertainment scene, which led him to purchase Studio 54. In 1994, he bought the bankrupt nightclub and the nearby 17-story office building at 254 W. 54th Street from the Bank of Tokyo for $5.5 million. This was a rare opportunity to breathe new life into a famous but struggling Midtown Manhattan property, with room for a theater and office improvements. While many saw only risk, Hadar saw a chance for an exciting, new theater.
When Hadar took over, the problems were clear. About 40% of the office tower was empty, tenants weren’t paying rent, and people didn’t trust the market. The theater had lost its original feel as it changed from nightclubs to TV studios to failed entertainment projects. The unclear division between the theater and the offices made renting more difficult and the building less pleasant for everyone.
Faced with these issues, Hadar took a bold, creative approach. Two years after buying the property, he bought out his partners and started a full renovation. He added new elevators, made more space usable, improved building systems, and restored the Art Deco lobby. These changes attracted creative tenants, including Axis Recording Studio, which hosted artists such as Madonna. He also sold the theater’s air rights, helping him get back the buyout costs and turning a problem into a financial gain.
While renovations progressed, an important opportunity emerged. When the Roundabout Theatre Company wanted to stage Cabaret but couldn’t afford market rent or the needed renovations, Hadar came up with a creative partnership. He paid for the theater’s restoration, including changes for Broadway-style seating and immersive staging, offered lower rent, covered startup costs, and set up repayment as a share of the show’s profits. He also secured the right to run the theater’s concessions and food and beverage services. This deal worked for both sides: Roundabout could put on a major show without huge upfront costs, and Hadar gained a strong tenant and shared in the success.
Hadar’s concessions plan quickly proved successful. When Cabaret opened at Studio 54 in August 1998, food and drink sales became some of the most profitable on Broadway, second only to The Lion King. These strong sales, along with high ticket revenue, made Studio 54 a popular and consistently profitable venue.
Hadar also turned extra space into “Upstairs at 54,” a flexible cabaret and event area. He improved the building’s function by adding separate entrances and pathways for office tenants and theater guests, making the property more effective as a mixed-use space.
Five years later, Hadar’s vision paid off when the Roundabout Theatre Company bought the theater for about $22.5 million, which was more than four times what Hadar had paid. By structuring the deal to keep some control and income rights, Hadar made a large profit and remained involved with the property.
This project transformed Studio 54 into a vibrant, profitable landmark, featuring a popular theater and modern office spaces. Hadar and Allied Partners showed that new ideas and creative problem-solving can turn a neglected property into a valuable asset and cultural icon, helping both the business and New York’s creative community.