When news broke in late April that Netflix was in advanced negotiations to acquire Studio City’s historic Radford Studio Center, talk in Hollywood quickly turned to the potential domino effect a purchase could have.
One direct impact could be on 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 (ICON, EPIC, and CUE) totaling more than 700,000 square feet in the complex and is paying $27.3 million in annual rent for the space through September 2031. It is also leasing Raleigh Studios Hollywood from Hackman Capital, with that deal also set to expire in 2031.
If Netflix buys Radford, one line of thought is: Will the company choose to move its base of operations to the historic Studio City property and vacate its existing leases with Hudson Pacific and Hackman?
The Hudson Pacific CEO gave a window into his view Thursday during an earnings call with Wall Street analysts, appearing to hint that Netflix may view Radford as an opportunity in the audio space while leaving open the possibility of retaining an office agreement with the streaming giant.
“With the conversation around Netflix, obviously out of respect for the tenant and our conversations with them, I can’t speak to what’s going on, but suffice it to say our relationship is healthy and positive,” Hudson Pacific CEO Victor Coleman said on an earnings call.
The executive added, “In terms of Radford’s situation and what their intentions are, I know we’ve had conversations with them. Again, it’s a 21-theater facility that’s really geared toward production and creative production as a campus. There are very few offices [space] On that campus right now, the office that was not damaged has been leased to CBS for an extended period of time. So, whether they buy it or not, it’s really up to them and it will serve as a facility on campus for sound stages. This is their calling.”
As part of a $1.85 billion deal to sell Radford at the top of the market in 2021, Shari Redstone’s media empire then called ViacomCBS also signed a long-term lease for CBS to occupy space in the plot of land it had just sold with new owners Hackman Capital and Square Mile Capital Management. Titles like Seinfeld and Gilligan’s Island It is among the classic films shot on its soundstages, which include “Residential Street,” “Central Park” and “New York Street” environments geared toward a variety of film and television use cases.
While this sale may have been a success for Redstone, it was not so for Hackman as 2022 turned out to be peak spending on studio content, with production declining and audio voiding over the past three years. “This lot is completely dead, and the entire building is completely empty,” says a source who currently rents the Radford Studio Center. Hollywood ReporterIt is estimated that more than 50 percent of the land is currently unused.
Faced with fewer anchor tenants, Hackman defaulted on its mortgage and Goldman Sachs took over and is negotiating with Netflix to buy the plot for a price of up to $330 million. The company, led by Michael Hackman, has a significant presence in audio but also has a large footprint in production centers outside of California and the US, including Canada and the UK, and has refocused its efforts on its most active locations.
If Goldman Sachs sells Radford to Netflix for the deal price, the streaming giant will have a new owned and operated production space in Los Angeles to go along with the Netflix Studios Albuquerque (formerly ABQ Studios) location in New Mexico and an East Coast production hub planned at the former Fort Monmouth base in New Jersey. How it eventually gets there may have an impact on all the other audio players in Los Angeles.
