Netflix leases the ICON, EPIC and CUE buildings from Hudson Pacific in Los Angeles. Photo by Mario Tama/Getty Images When news broke in late April that Netflix was in advanced negotiations to snap up the historic Radford Studio Center in Studio City, talk in Hollywood quickly turned to the potential domino effect that the buy could have.
One direct impact could be to Hudson Pacific, the company that currently leases to Netflix its Los Angeles headquarters at Sunset Bronson Studios on Sunset Boulevard. As of now, the Ted Sarandos and Greg Peters-led streaming giant occupies three buildings (the ICON, EPIC and CUE) totaling more than 700,000 square feet of space at the complex and paying $27.3 million in annual rent for the space through September 2031. It also leases Raleigh Studios Hollywood from Hackman Capital, with that deal also set to expire in 2031.
If Netflix buys Radford, one line of thinking goes, would the company choose to move its base of operations to the historic Studio City property and vacate its current leases with Hudson Pacific and Hackman?
Hudson Pacific’s CEO gave a window into its view on Thursday during an earnings call with Wall Street analysts, seeming to hint that Netflix may be viewing Radford as an opportunity in the soundstage space while leaving open the possibility of keeping an office agreement with the streaming giant.
“With the conversation around Netflix, obviously in deference to the tenant and our conversations with them, I can’t talk about what’s going on, but suffice to say that our relationship is intact and it’s positive,” said Hudson Pacific CEO Victor Coleman on an earnings call.
The exec added, “On the Radford situation and what their intent is, I know we’ve had conversations with them. Again, it’s a 21-soundstage facility that is really directed to production and creative production as a campus. There’s very little office [space] on that campus right now, and the office that is intact is leased to CBS for a long period of time. And so, whether or not they buy it, is really up to them and it’s going be a campus facility for sound stages. That’s their call.”
As part of its $1.85 billion deal to sell Radford at the top of the market in 2021, Shari Redstone’s then-named media empire ViacomCBS had also inked a long-term lease for CBS to occupy space in the lot that it had just sold with new owners Hackman Capital and Square Mile Capital Management. Titles like Seinfeld and Gilligan’s Island are among the classics that have filmed on its soundstages, which include “residential street,” “Central Park,” and “New York Street” environments geared toward a variety of shoot uses cases in film and TV.
While that sale may have worked out for Redstone, it didn’t for Hackman as 2022 turned out to be the peak of studio content spend, with production declines and emptier soundstages over the past three years. “This lot is completely dead, whole buildings are completely empty,” a source who is a current tenant at Radford Studio Center tells The Hollywood Reporter, estimating that more than 50 percent of the lot is currently being unused.
Faced with fewer anchor tenants, Hackman defaulted on its mortgage and Goldman Sachs took over and is negotiating with Netflix to buy the lot at a price tag in the $330 million range. The company, led by Michael Hackman, is a major presence in the soundstage space but also has a large footprint in production hubs outside of California and the U.S., including in Canada and the U.K., and has been refocusing its efforts on its most bustling locations.
If Goldman Sachs sells Radford to Netflix at its bargain price, the streaming giant would then have a new owned-and-operated Los Angeles production space to go along with its Netflix Studios Albuquerque location (formerly ABQ Studios) in New Mexico and in-the-works East coast production hub planned at the former Fort Monmouth base in New Jersey. How it ultimately gets there may have a downstream effect on all other soundstage operators in Los Angeles.
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