Blackstone Group and Hudson Pacific Properties are deep in talks to form a partnership to develop production studios in Los Angeles.
Valued at $1.4 billion, the deal would build out HPP’s extensive studio and sound stage portfolio, according to Commercial Observer, which first reported the news. A deal could be struck in days.
HPP owns three studio lots and 36 sound stages totaling 1.2 million square feet of space across 41 acres. The Victor Coleman-led firm became the largest independent studio owner in the country in 2017, when it added its third studio to its portfolio, a property in Hollywood it renamed Sunset Las Palmas. HPP acquired the 369,000-square-foot studio then set out to add 575,000 square feet of new development to the site.
The firm has built out a number of studios over the last few years, adding office space and new studio facilities. It has also signed some major tenants, including Netflix. The streaming giant leases more than 700,000 square feet of office space at HPP-owned properties surrounding its Sunset Bronson Studios lot in Hollywood.
The new partnership would be Blackstone’s biggest investment deal in the content creation space. The massive investment firm has been pouring money into fast-growing economic sectors, including e-commerce via logistics real estate.
Online content creation has performed well throughout the coronavirus pandemic, with consumers gorging on the likes of Netflix, YouTube and related offerings.
Blackstone president Jon Gray specifically mentioned online content creation — along with several others — as a target sector for future investment in an April earnings call, the Journal noted.