Is Netflix making a major real estate move in Los Angeles? Talks about purchasing Radford Studio Center
The streaming giant is reportedly in negotiations to acquire the Radford Studio Center
According to the CinemaDrame News Agency, Netflix has for years been a major tenant at the Sunset Studios, using the Icon Building as its Los Angeles headquarters, as well as the Epic and Q buildings, which are part of a larger complex on Sunset Boulevard.
The company, co-led by co-CEOs Ted Sarandos and Greg Peters, currently leases these spaces under a contract with Hudson Pacific Properties that runs through 2031. The agreement generates $27 million in base rent annually for Hudson Pacific.
In early March, Hudson Pacific CEO Victor Coleman told investors at a conference that “our discussions with them are ongoing and flexible,” referring to ongoing lease renewal talks. Netflix is the company’s second-largest tenant, occupying 722,305 square feet—only Google ranks higher—meaning losing Netflix would be a major blow for the studio operator.
Coleman also said during a February earnings call: “We are fully engaged with Netflix and believe this campus, given its quality, location, and development potential, is the best long-term solution for their office needs in Los Angeles.”
However, the likelihood of a departure now appears to be increasing. According to Bloomberg, citing anonymous sources, Netflix is in talks with Goldman Sachs to acquire the Radford Studio Center. Netflix declined to comment, and Hudson Pacific representatives did not respond.
The historic studio was owned by ViacomCBS until 2021, when it was sold for $1.85 billion as part of Shari Redstone’s efforts to streamline her media empire, to Hackman Capital Partners and Square Mile Capital Management.
Michael Hackman’s firm believed that studio infrastructure would become highly valuable assets, especially as major companies were spending heavily to compete in streaming production during the boom years. At the time, Wall Street investors and private equity firms also saw strong potential in these assets, despite lingering effects from the COVID-era commercial real estate downturn.
However, ahead of the 2023 writers’ and actors’ strikes, production spending began to decline and studio utilization dropped. Concerns about the impact of artificial intelligence on content production have also weighed on the value of such investments.
According to a Bloomberg report in January, Goldman Sachs took control of the Radford complex after Hackman defaulted on a loan. Hackman also owns and operates the historic Raleigh Studios in Los Angeles, Sony Pictures Animation Camp Studios in Culver City, and several other production facilities.
Last year, the company put one of its Raleigh subsidiary properties, Sitaki Studios in Van Nuys, up for sale at $18 million, with an executive stating it was a “non-core asset in our portfolio, as we focus on larger, primary studio facilities.” The main Raleigh Studios lot on Melrose Boulevard still leases to Netflix through 2031.
Netflix, which recently received $2.8 billion in compensation related to its abandoned bid for Warner Bros., has been expanding its production infrastructure beyond Los Angeles offices. This includes former ABQ Studios in Albuquerque, New Mexico, and a $1 billion investment in a new East Coast hub at the former Fort Monmouth site in New Jersey, which is still years away from completion.
The expansion also includes its global production footprint. This year alone, Netflix has announced a new headquarters in Mexico City, opened an office in Buenos Aires, and expanded its Central European hub in Poland, strengthening infrastructure for its 325 million subscribers.
Meanwhile, Hudson Pacific, which operates Sunset Studios, is also expanding to the U.S. East Coast, opening the new “Sunset Pier 94” complex in Manhattan in January, where season two of Dexter: Resurrection from Paramount Television will be produced.
