Netflix Inc. is under contract to buy Radford Studio Center, an historic Los Angeles movie studio space, for a fraction of its 2021 $1.85 billion sale price after lenders including Goldman Sachs Group Inc. repossessed the property.
The price is close to $400 million, according to two people with knowledge of the transaction, which is expected to close in the third quarter.
The Times reported in AprilNetflix had plans to buy the historic studio property.
The one-time silent movie lot has been home to many popular TV series over the decades, including Gunsmoke, Gilligan’s Island and Seinfeld.
Netflix wants to consolidate its real estate footprint in one place and has been considering relocating from a group of Hollywood buildings it leases from Hudson Pacific Properties Inc. The Hudson Pacific leases expire in 2031.
Radford’s current owner, Hackman Capital Partners, defaulted on $1.1 billion of bondholder debt and turned the property over to lenders led by Goldman after it was unable to reach a refinancing deal last year. The sale will wipe out close to two-thirds of the debt.
The value of Los Angeles studio real estate has tumbled since interest rates climbed and production plummeted following strikes in 2023 by unions representing writers and actors. Landlords unaffiliated with studios, such as Hackman, have been hit particularly hard as production moved to space owned by the entertainment giants. Occupancy of LA soundstages fell to 62% in the first half of last year, according to FilmLA, a local permitting group.
Representatives of Goldman and Netflix declined to comment. A Hackman representative didn’t immediately provide a comment.
Netflix, which has historically leased rather than owned real estate, has stepped up investing in studio lots. It’s currently developing a $1 billion production center in Fort Monmouth, New Jersey. The streaming service reported $12.3 billion in cash and equivalents in its most recent quarter. Netflix was paid a $2.8 billion breakup fee by Paramount Skydance Corp., which won a bidding war for Warner Bros. Discovery Inc.
Before the recent slowdown, Hackman went on a buying spree of movie lots, banking on ever-growing demand for streaming TV production. In March, Deutsche Bank AG sued Hackman to foreclose on its Kaufman Astoria Studios in New York. Hackman-owned Television City in Los Angeles and Manhattan Beach Studios in nearby Manhattan Beach, California, are both being marketed after lenders led by Deutsche Bank pushed for the sale, Bloomberg reported in May.
Brokerage Cushman & Wakefield Ltd. is selling the $240 million loan on the 22-acre Manhattan Beach property, which it describes in a marketing document as “one of the most strategically positioned opportunities in coastal Los Angeles, combining an institutional-quality operating asset with some of the most irreplaceable underlying land in the South Bay.”
The Radford Studio lot was only 71% leased as of March, according to a mortgage filings.
Gittelsohn writes for Bloomberg.
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