Netflix buys Radford Studio Center for $400 million, 78% below peak

Netflix Inc. is under contract to acquire Radford Studio Center, a historic Studio City movie lot, for close to $400 million — roughly 78% less than the $1.85 billion Hackman Capital Partners paid for the property five years ago, according to two people with knowledge of the transaction. The deal is expected to close in the third quarter.

"The price reflects how dramatically the math on studio real estate has changed since interest rates rose and production collapsed after the 2023 strikes," said Tom Brennan, M&A analyst at Edgen. "Netflix is getting a prime asset at a distressed price while consolidating its production footprint."

The 71%-leased lot, home to classic TV series including "Gunsmoke," "Gilligan's Island" and "Seinfeld," was repossessed by lenders led by Goldman Sachs Group Inc. after Hackman defaulted on $1.1 billion of bondholder debt. The sale will wipe out close to two-thirds of that debt. Netflix reported $12.3 billion in cash and equivalents in its most recent quarter and collected a $2.8 billion breakup fee after losing the bidding war for Warner Bros. Discovery Inc. to Paramount Skydance Corp.

The acquisition marks a shift from leasing to owning production infrastructure for Netflix, which currently leases Hollywood office space from Hudson Pacific Properties Inc. under leases expiring in 2031. The streaming giant is also developing a $1 billion production center in Fort Monmouth, New Jersey. Buying Radford gives Netflix control over its own soundstage capacity at a time when independent landlords are struggling: occupancy of Los Angeles soundstages fell to 62% in the first half of last year, according to FilmLA, and Hackman-owned Television City and Manhattan Beach Studios are both being marketed for sale after lender pressure.

A Distressed Market Creates an Opening

The collapse in studio real estate values has been brutal for speculative landlords. Hackman went on a buying spree during the streaming boom, betting on insatiable demand for production space. Instead, the 2023 writers' and actors' strikes triggered a production pullback that pushed occupancy rates to multiyear lows. Deutsche Bank AG has already sued Hackman to foreclose on its Kaufman Astoria Studios in New York. The 22-acre Manhattan Beach Studios property is being marketed with a $240 million loan, described by broker Cushman & Wakefield Ltd. as "one of the most strategically positioned opportunities in coastal Los Angeles."

For Netflix, the timing aligns with a broader strategic pivot. The company, which has historically leased rather than owned real estate, is investing in physical production capacity as it seeks to reduce reliance on third-party content. The Radford purchase follows a period of dealmaking whiplash: Netflix shares have fallen 37% over the past year, hurt by the failed Warner Bros. Discovery bid and weak quarterly results. Yet the stock now trades at 20 times projected 2027 earnings, its lowest forward multiple in three years.

The Radford deal gives Netflix a permanent home for its growing roster of original productions — and at a price that suggests the streaming wars' infrastructure arms race may be entering a more disciplined phase.

This article is for informational purposes only and does not constitute investment advice.