Netflix Poised to Buy Radford Studio Lot at Auction for Steep Discount

Nine months after lenders repossessed the historic Radford Studio Center lot from Hackman Capital Partners, the property is headed to auction.

Netflix had been in talks to buy the 55-acre Studio City lot from Goldman Sachs-led lenders for as much as $400 million, a fraction of the $1.85 billion Hackman paid for it in 2021. The deal was expected to close earlier this year, though the deadline passed without a sale.

Now, Radford is going on the block. A foreclosure auction is scheduled for Nov. 24 in Pomona, according to a notice recorded in Los Angeles County. The lenders are looking for an estimated $1.3 billion — roughly the amount of debt tied to the property — though the final purchase price will likely come in far below that figure as production levels in Los Angeles hover around historic lows.

The expectation is for Netflix to come out of the auction as the top bidder, giving the entertainment giant ownership of a major Los Angeles production campus.

“The deal is progressing on the agreed upon timetable and with the agreed upon sets of milestone dates,” says a Netflix spokesperson.

The purchase will shake up Netflix’s production footprint in Los Angeles. For years, it’s been the anchor tenant at Sunset Studios, owned by Hudson Pacific Properties, while also filming at Raleigh Studios. With Radford, Netflix could consolidate production scattered across the region while cutting costs associated with renting by becoming an owner of a sprawling shooting campus.

Heading into the auction later this month, Netflix is poised to acquire Radford at a generational discount. The reported $400 million price point would be roughly 22 percent of the $1.85 billion Hackman Capital paid for it in 2021, a massive repricing of a legacy Hollywood lot and indicative of the flight of filming away from the region.

“It’s a done deal,” says a person with knowledge of the situation.

Netflix asked Goldman to handle the foreclosure and associated costs, says a source familiar with the talks, and facilitate a sale. A consideration was the so-called mansion tax, which imposes a 5.5 percent levy for properties valued above $10.9 million, according to the source. Here, that could’ve been roughly $22 million.

“There are a number of reasons a deal would be structured in this fashion that have nothing to do with taxation,” says a source familiar with the negotiations.

If Netflix had bought Radford from the lenders, it would’ve had to manage the foreclosure process, potentially adding time and uncertainty before it could take control of the property.

Still, a competing bidder could emerge during the auction that drives the price above the reported $400 million Netflix was considering. Private equity looking to buy a distressed asset or institutional real estate investors could come into play, though the number of entities with the appetite to take on a production campus in L.A. as filming levels continue to plunge is believed to be limited.

A Radford purchase will also have an impact on Netflix’s office operations, though the property can’t fulfill all of the company’s office space needs. For years, Netflix has leased the ICON, EPIC and CUE buildings at Sunset Studios.

Cushman & Wakefield is marketing a loan, led by Mike Condon Jr. and Kevin Donner, secured by Netflix’s animation office on Vine Street., a roughly 95,000-square-foot campus owned by Clarion Partners. The property is fully leased to Netflix through January 2031, with $23.8 million in remaining rent, according to the offering.

The offering is for the debt, not the property itself. But the marketing of a loan secured by a building whose sole tenant is Netflix, who’s under contract for several more years, could be an early sign of uncertainty surrounding the company’s longer-term tenancy plans.

There’s no indication that Netflix plans to vacate the Vine Street campus. Still, the timing is notable: the lease expires in January 2031, just months before Netflix’s leases across three Hudson Pacific Properties buildings — EPIC, ICON and CUE — are scheduled to expire in September 2031. The property doesn’t appear to be on sublease markets.

“Is this next?” says the source, who notes that the loan offering is “unusual” considering the timing.

Another person close to Netflix says that the company has “not had any conversations with the landlord regarding a change in the lease at Vine.”

Since 2018, Netflix has filmed more than 300 movies and TV shows primarily in L.A.

“Los Angeles is an incredibly important place for film and television production, and we’re committed to keeping it one of our core production hubs in the US — supporting the city and the creative community that makes it such a vibrant place to work,” it said in a press release earlier this year. “With its diverse locations, deep bench of talent, experienced crews, best-in-class vendors and a wide variety of locations, the city offers everything we need to bring ambitious stories to life.”