Netflix Buying Foreclosed L.A. Studios at Huge Discount

Netflix is set to drop nearly $400 million on a century-old Los Angeles movie studio that was seized by banks in a foreclosure. The Studio City lot last traded five years ago for $1.85 billion.

The Los Gatos-based media and streaming company is under contract for the Radford Studio Center at 4024 Radford Avenue, Bloomberg reported. The sellers were lenders led by Goldman Sachs.

The deal for the 55-acre lot with 1.2 million square feet of offices and studios works out to nearly $7.3 million an acre, or $333 per square foot.

Hackman Capital Partners, based in Culver City, bought the studios in 2021 for $1.85 billion. That’s $33.6 million per acre or $1,542 per square foot — representing a 78 percent drop in value after the current sale.

The former Republic and CBS studios along the Los Angeles River in the southeast San Fernando Valley once cranked out Westerns featuring Roy Rogers, Gene Autry and John Wayne and was home to TV series including “Gunsmoke,” “Gilligan’s Island” and “Seinfeld.”

The Radford studios, founded in 1928, has 22 sound stages, three backlot sets, plus 18 office buildings and 20 bungalows totaling 210,000 square feet, according to its website. As of March, it was 71 percent leased, according to mortgage filings.

Last year, Hackman defaulted on $1.1 billion of bondholder debt and flipped the keys to its lenders after it failed to reach a refinancing deal. The sale will wipe out almost two-thirds of the Hackman debt, according to Bloomberg.

The value of Los Angeles studios dropped after higher interest rates and plunging production in the wake of strikes in 2023 by unions representing writers and actors.

Landlords such as Hackman, unaffiliated with studios, were slammed after movie and TV production moved to studio properties owned by media giants. Occupancy of LA soundstages fell to 62 percent in the first half of last year, according to FilmLA.

Netflix, which typically leased rather than owned real estate, has ramped up ownership of studio lots, and is now developing a $1 billion production center in Fort Monmouth, New Jersey.

The streaming giant reported $12.3 billion in cash last quarter. It was also paid a $2.8 billion breakup fee by Paramount Skydance, which won a bidding war for Warner Bros. Discovery.

Before the brakes on studio production, Hackman went on a buying spree of movie lots, banking on ever-growing demand for streaming TV content.

In March, Deutsche Bank AG sued Hackman to foreclose on its Kaufman Astoria Studios in New York. Hackman-owned Television City in the Fairfax District and Manhattan Beach Studios are both listed after lenders led by Deutsche pushed for a sale, Bloomberg reported last month.

As of January, Hackman was the world’s largest independent owner of studio properties. Its holdings included 19 facilities with 145 active sound stages, with 60 stages in development.

— Dana Bartholomew

Editor’s note: This story was updated to state Netflix is under contract for the property in a deal not yet completed.