For years, Netflix has been the anchor tenant at Sunset Studios in Los Angeles, making the ICON building its Los Angeles headquarters and occupying the EPIC and CUE buildings as part of the complex on Sunset Boulevard.
The streaming giant run by co-CEOs Ted Sarandos and Greg Peters has a lease on those buildings through 2031 with the owner, Hudson Pacific Properties, which receives $27 million in base annualized rent from Netflix.
As of early March, Hudson Pacific CEO Victor Coleman described at an investor conference that “our conversations with them are fluid” regarding future leases. Netflix is the No. 2 tenant for Hudson Pacific among its office tenants, occupying 722,305 square feet of space, just behind Google, so a loss of the streaming giant would be a big one for the soundstage operator.
“We remain fully engaged with Netflix and believe this portfolio is the optimal long-term solution for their LA office needs, given the quality, location and expansion potential of these assets,” Coleman had said on the company’s February earnings call.
But it seems like an exit could be a stronger possibility now. Netflix is in talks with Goldman Sachs to buy the Radford Studio Center, Bloomberg reported, citing unnamed sources, on Tuesday. Netflix and Hudson Pacific reps did not immediately reply for comment.
The historic studio was in the hands of the then-named ViacomCBS corp until 2021 when it was sold — as part of a slimming down of the Shari Redstone-run empire — to Hackman Capital Partners and Square Mile Capital Management for $1.85 billion.
At the time, Hackman Capital had bet that studio infrastructure would be a hot commodity as majors had been bulking up on spending for streaming shows near the height of what was then a race to catch up to Netflix. Then, ahead of the 2023 dual labor strikes of the Writers Guild and SAG-AFTRA, the content spend pullback hit and stage occupancy started waning.
Investment bank Goldman Sachs had taken over the Radford lot after Hackman defaulted on its mortgage, Bloomberg reported in January, citing a letter to investors that wasn’t made public. (Hackman hasn’t commented on its sales or divestments.)
Netflix, which just received a $2.8 billion break up fee in connection with its abandoned pursuit of Warner Bros., has made a concerted effort to build its soundstage bases over the years, outside of its L.A. office. Those include the formerly named ABQ Studios in Albuquerque, New Mexico as well as $1 billion to build its East coast base at the former site of Fort Monmouth, New Jersey (which won’t be ready for a few years).
That’s not counting its expanding global office and studio space portfolio. This year alone, Netflix unveiled its Mexico City headquarters, opened a Buenos Aires, Argentina office and touted an expansion of its Poland central European hub as it builds infrastructure to provide a content pipeline to serve its 325 million subscribers.
