Netflix gets lease, options on Raleigh Studios

Hackman Capital Partners has bagged the world’s largest streaming service as a tenant at Raleigh Studios in Hollywood, The Real Deal has learned.

Netflix signed a 10-year lease in December to occupy “several buildings” at Raleigh Studios, located at 5300 Melrose Avenue, according to lease documents filed with the City of Los Angeles. Financial terms of the deal were not disclosed and Hackman Capital declined to comment on the deal. Neither Netflix nor Raleigh Studios responded to requests for comment.

Built in 1915, the 309,000-square-foot Raleigh Studios complex currently comprises 13 soundstages ranging from 3,200 to 16,000 square feet in size.

Hackman Capital took over operations and management of Raleigh Studios in 2021, though the property is still owned by Raleigh Enterprises, founded by L.A. real estate mogul and hotelier George Rosenthal.

As part of the lease deal, Netflix also has the right of first offer on the studio lot, meaning the right to strike a deal for the property before the owners sell it to any third-party. Netflix already owns some of its own real estate — the firm bought a former Denny’s restaurant in Hollywood this month for $25 million.

The Los Gatos-based firm also has the right to lease space at a nearby building at 5259 Melrose Avenue, if or when it becomes available.

Netflix’s lease shows how streaming services and content creators have started signing long-term leases at studio properties, which were once reserved for networks one TV season at a time. This shift toward longer-term leases has led institutional investors to become more comfortable owning and investing in the asset class.

Hackman Capital is one of the most prominent developers and investors in studio real estate, buying up the once Sony-operated Culver Studios in 2014, MBS Media Campus in Manhattan Beach for $640 million in 2019 and Silvercup Studios in New York City for $500 million in 2020.

Netflix has grown its real estate footprint across Los Angeles over the past few years to more than 600,000 square feet.

Most recently, the company subleased space at an office property at 627 North Larchmont Boulevard in April 2020, records show, and took over the Bay Theatre at Rick Caruso’s Palisades Village. It also leases space across Hudson Pacific Properties and Blackstone’s portfolio of studios in L.A., at LPC West’s 817 Vine Street and 171,000 square feet in Burbank.