By John Gittelsohn, Lucas Shaw and Thomas Buckley | Bloomberg
Netflix Inc. dropped out of the bidding for Warner Bros. Discovery Inc., but it may now get another, smaller studio lot for a lot less money.
The streaming TV pioneer is said to be in talks to buy a historic Los Angeles movie studio lot for a fraction of its 2021 $1.85 billion sale price after lenders including Goldman Sachs Group Inc. repossessed the property.
The final price for Radford Studio Center hasn’t been determined and the deal still hasn’t closed, according to four people with knowledge of the discussions. The potential price is less than one-third of the 2021 sale, according to one person involved in the talks.
The one-time silent movie lot has been home to many popular TV series over the years, including Gunsmoke, Gilligan’s Island and Seinfeld.
Netflix wants to consolidate its real estate footprint in one place and has been considering relocating from a group of Hollywood buildings it leases from Hudson Pacific Properties Inc. since at least last year.
Radford’s current owner, Hackman Capital Partners, defaulted on $1.1 billion of debt and turned the property over to lenders led by Goldman after it was unable to reach a refinancing deal last year.
The value of Los Angeles studio real estate has tumbled since interest rates climbed and production plummeted following strikes in 2023 by unions representing writers and actors. Landlords unaffiliated with studios, such as Hackman, have been hit particularly hard as production moved to space owned by the entertainment giants. Occupancy of LA soundstages fell to 62% in the first half of last year, according to FilmLA, a local permitting group.
Representatives of Hackman, Goldman and Netflix declined to comment.
Netflix, which has historically leased rather than owned real estate, has stepped up investing in studio lots. It’s currently developing a $1 billion production center in Fort Monmouth, New Jersey. The streaming service reported $12.3 billion in cash and equivalents in its most recent quarter, after being paid a $2.8 billion breakup fee by Paramount Skydance Corp., which won the bidding war for Warner Bros.
Hackman went on a buying spree of movie lots, banking on ever-growing demand for streaming TV production. But its investments ran into trouble when interest rates jumped and domestic filming collapsed. In March, Deutsche Bank AG sued Hackman to foreclose on its Kaufman Astoria Studios in New York.
The Radford Studio lot was only 61% leased as of September with about half of the remaining leases scheduled to expire through this year, according to mortgage filings.
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