Streaming giant Netflix is buying a Los Angeles film studio at a price that will seem like something from a horror film for other owners in the sector.
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The company is under contract to buy Radford Studio Center for about $400M from a group of lenders led by Goldman Sachs, Bloomberg reports. That compares with an appraisal of $1.8B in 2021.
The 55-acre, 1.1M SF studio lot was previously owned by Hackman Capital Partners, but the loan matured last year and a restructuring or refinancing deal could not be reached with bondholders that own the debt.
The studio is famous for hosting productions including Seinfeld and Gilligan’s Island. The property was 71% leased as of March. In 2024, the revenue from the property was only enough to pay 21% of the interest.
"While disappointing, we do not see a realistic alternative," Hackman said of the default in a letter to investors last year.
Studio property has been hit hard by a double-whammy of rising interest rates and falling occupancy — streaming services have pulled back from new productions in recent years in the wake of strikes and a slowdown in new subscriptions.
Hackman also defaulted on a $258M loan tied to its MBS Media Campus in Manhattan Beach, California, this month and could be facing foreclosure.
"It's been a really tough time for studio owners," Hackman Capital Partners CEO Michael Hackman said at a Bisnow event this week. "It's really been difficult. We've all been going through it."
Netflix has typically leased rather than owned its studio space but is looking to consolidate its productions into one facility rather than having several locations around LA. It is also building a $1B facility in Fort Monmouth, New Jersey. The streaming giant is currently a major tenant of Hudson Pacific Properties.
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