Nine months after lenders repossessed the historic Radford Studio Center land from Hackman Capital Partners, the property is up for auction.
Netflix was in talks to buy the 55-acre Studio City plot from lenders led by Goldman Sachs for up to $400 million, a fraction of the $1.85 billion Hackman paid for it in 2021. The deal was expected to close earlier this year, although the deadline passed without a sale.
Now Radford is leaving. A foreclosure auction is scheduled for Nov. 24 in Pomona, according to a notice filed in Los Angeles County. Lenders are seeking about $1.3 billion — roughly the amount of debt tied to the property — although the final purchase price is likely to be much lower than that figure as production levels in Los Angeles hover around historic lows.
Netflix is expected to emerge from the auction as the highest bidder, giving the entertainment giant ownership of a major Los Angeles production campus.
“The deal is progressing according to the agreed timetable and agreed key dates,” a Netflix spokesperson said.
This purchase will shake up Netflix’s production footprint in Los Angeles. For years, he was the anchor tenant at Sunset Studios, owned by Hudson Pacific Properties, while also filming at Raleigh Studios. With Radford, Netflix could consolidate scattered production across the region while reducing costs associated with rental by gaining ownership of a sprawling filming campus.
As the auction approaches later this month, Netflix is set to acquire Radford at a generationally discounted price. The reported price of $400 million would represent about 22% of the $1.85 billion paid by Hackman Capital in 2021, a massive revaluation of an old Hollywood lot and indicative of the flight of film sets away from the region.
“It’s done,” says a person with knowledge of the situation.
Netflix has asked Goldman to handle the foreclosure and associated costs, a source familiar with the discussions said, and to facilitate a sale. A quid pro quo was the so-called mansion tax, which imposes a 5.5 percent levy on properties valued at more than $10.9 million, according to the source. Here it could have been around $22 million.
“There are a number of reasons why a deal would be structured this way, which have nothing to do with taxation,” says a source close to the negotiations.
If Netflix had purchased Radford from the lenders, it would have had to handle the foreclosure process, which could add time and uncertainty before it could take control of the property.
Still, a competing bidder could emerge during the auction, which would push the price above the $400 million Netflix is considering. Private equity funds looking to buy a distressed asset or institutional real estate investors could come into play, although the number of entities willing to locate a Los Angeles production campus as filming levels continue to fall appears limited.
A purchase of Radford will also impact Netflix’s office operations, although the property cannot meet all of the company’s office space needs. For years, Netflix leased the ICON, EPIC and CUE buildings at Sunset Studios.
Cushman & Wakefield is marketing a loan, led by Mike Condon Jr. and Kevin Donner, guaranteed by Netflix’s animation office on Vine Street, a roughly 95,000-square-foot campus owned by Clarion Partners. The property is fully leased to Netflix through January 2031, with $23.8 million in rent remaining, according to the offer.
The offer is for the debt, not the property itself. But marketing a loan secured by a building whose only tenant is Netflix, under contract for several more years, could be an early sign of uncertainty about the company’s longer-term rental plans.
There is no indication that Netflix plans to leave the Vine Street campus. Still, the timing is remarkable: The lease expires in January 2031, just months before Netflix’s leases on three Hudson Pacific Properties buildings — EPIC, ICON and CUE — expire in September 2031. The property does not appear to be in the sublease markets.
“Is it next?” ” says the source, who notes that the loan offer is “unusual” given the timing.
Another person close to Netflix says the company has “had no conversations with the landlord regarding a change to the lease at Vine.”
Since 2018, Netflix has filmed over 300 films and TV shows, mostly in Los Angeles.
“Los Angeles is an incredibly important location for film and television production, and we are committed to making it one of our premier production hubs in the United States, supporting the city and creative community that make it such a vibrant place to work,” he said in a press release earlier this year. “With its diverse locations, deep talent pool, experienced teams, best-in-class suppliers and wide variety of locations, the city offers everything we need to bring ambitious stories to life. »
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