Television City, an iconic studio in Los Angeles that has been the filming location for productions ranging from 'The Price Is Right' to 'American Idol', is on the verge of being sold. This represents another setback for its owner and studio magnate, Hackman Capital Partners (HCP).
A group of lenders led by Deutsche Bank filed a notice of default last month, claiming Hackman owes more than US$357 million on the 25-acre property in the Fairfax District, as reported by the Los Angeles Times. The default follows months of negotiations between Hackman and its lenders as the company weighs alternatives. It is another prestigious studio property in HCP's industry-leading portfolio that has encountered difficulties.
In a statement to Commercial Observer, HCP commented that, as an owner of studio facilities in various US and international markets, the company has experienced first-hand how Los Angeles studio properties are exposed to significant pressure from high production costs and uncompetitive tax incentives. It added that Television City is a local treasure and home to decades of iconic productions. Discussions with lending partners are actively continuing, whilst all available alternatives for the future are being carefully examined.
Background to the Difficulties
This development is the latest chapter in the unravelling of the industry wager that streaming would drive an expansion and extension of demand for studio properties. Culver City-based HCP built the largest portfolio of studio properties over the last decade, including the acquisition of Television City in 2019 for US$750 million with partner Affinius Capital (formerly Square Mile Capital) from CBS. HCP had also planned extensive redevelopment worth approximately US$1 billion, which was to add nearly 1 million square feet of office space, sound stages, production facilities, and retail space.
However, show business and HCP's portfolio have been significantly impacted by the post-pandemic slowdown, the writers' and actors' strikes in 2023, rising interest rates, and studio consolidation. Earlier this year, Goldman Sachs took control of the 1.2 million square foot Radford Studio Centre – where HCP had also planned a US$1 billion expansion with another 1 million square feet of sound stage space – after the company defaulted on a US$1.1 billion mortgage. The property is now reportedly close to being sold to Netflix for approximately US$400 million, a fraction of the almost US$1.9 billion Hackman and his partners had paid in 2021.
Meanwhile, Deutsche Bank is also marketing HCP's Manhattan Beach Studios and has taken action against other Hackman-backed assets in L.A. and New York. Television City borders Caruso's The Grove and the Original Farmers Market. Sources familiar with the process informed the L.A. Times that Rick Caruso and the Gilmore family could be considered potential bidders.
