For many years, Netflix was the anchor tenant at Sunset Studios, causing ICON to build its Los Angeles headquarters and occupy the EPIC and CUE buildings as part of the complex on Sunset Boulevard.
The streaming giant, run by co-CEOs Ted Sarandos and Greg Peters, has a lease on these buildings through 2031 with the landlord, Hudson Pacific Properties, which receives $27 million in annual base rent from Netflix.
As of early March, Hudson Pacific CEO Victor Coleman described at an investor conference that “our conversations with them have been smooth” regarding future leases. Netflix is Hudson Pacific’s No. 2 tenant among its office tenants, occupying 722,305 square feet, just behind Google, so losing the streaming giant would be a big loss for the Soundstage operator.
“We remain fully engaged with Netflix and believe this portfolio is the ideal long-term solution for their Los Angeles office needs, given the quality, location and expansion potential of these assets,” Coleman said on the company’s February earnings call.
But it seems that exit may be a stronger possibility now. Netflix is in talks with Goldman Sachs to buy the Radford Studio Center, Bloomberg reported Tuesday, citing unnamed sources. Netflix declined to comment on the story. A representative for Hudson Pacific did not respond for comment.
The landmark studio was in the hands of then-named ViacomCBS until 2021 when it was sold — as part of the downsizing of Shari Redstone’s empire — to Hackman Capital Partners and Square Mile Capital Management for $1.85 billion.
The Michael Hackman-led company had bet that studio infrastructure would be a hot commodity, as major companies were increasingly spending on streaming shows near the peak of what was then a race to catch up with Netflix. Wall Street and private equity firms also saw a rise in studio infrastructure at the time, not too far removed from the Covid-19 pandemic, when office space was seen as a shakier bet.
Then, before the 2023 dual strikes by the Writers Guild and SAG-AFTRA, content spending hit a plateau and theater occupancy began to decline. (Now, uncertainty about how AI workflows will impact content creation is also affecting big bets on audio infrastructure.)
Investment bank Goldman Sachs acquired Radford Group after Hackman defaulted on its mortgage, Bloomberg reported in January, citing a letter to investors that was not made public. Hackman also manages the historic Raleigh Studios in Los Angeles, the Sony Pictures Animation Campus in Culver City, and more sound stages and major production facilities.
Last year, Hackman put a “for sale” sign on Raleigh’s sister site, Saticoy Studios in Van Nuys, with an asking price of $18 million, telling a company executive. Hollywood Reporter It is “non-core to our broader studio portfolio, which is focused on larger, flagship properties.” The flagship Raleigh Studios site, located on Melrose Street, has Netflix as an anchor tenant through 2031 as well.
Netflix, which just received a $2.8 billion breakup fee in connection with its abandoned Warner Bros. pursuit, has made an effort to build up its voice base over the years, out of its Los Angeles office. These include the formerly named ABQ Studios in Albuquerque, New Mexico, as well as $1 billion to build its base on the East Coast at the former site of Fort Monmouth, New Jersey (which won’t be ready for a few years).
This does not include its expanding global portfolio of offices and studios. This year alone, Netflix has unveiled its headquarters in Mexico City, opened an office in Buenos Aires, Argentina, and touted the expansion of its Poland hub in central Europe as it builds the infrastructure to provide a content pipeline to serve its 325 million subscribers.
Meanwhile, Hudson Pacific, operator of Soundstage Studios Sunset Studios, is looking to the East Coast for expansion, opening purpose-built Sunset Pier 94 Studios in Manhattan in January with Paramount Television Studios. Dexter: Resurrection Sign in to produce its second season on site.
