Financial Strain Threatens Future of Television City and Manhattan Beach Studios
In a significant development for the entertainment industry's physical infrastructure, Hackman Capital Partners, a leading independent proprietor of soundstages in Los Angeles, is grappling with severe financial pressures. Lenders have commenced proceedings to sell Television City and are assessing the future of Manhattan Beach Studios, as the region experiences a notable decline in production activity.
A consortium of lenders, led by Deutsche Bank, has initiated the sales process for Television City, a historic property situated in central Los Angeles. The outstanding debt owed to these lenders exceeds $357 million, as indicated by a recent notice of default. Concurrently, Deutsche Bank is also seeking to divest Manhattan Beach Studios, with an industrial firm reportedly making a pre-emptive offer. This proposed acquisition could lead to the redevelopment or demolition of the existing 15 soundstages on the expansive 22-acre studio campus.
A spokesperson for Hackman Capital acknowledged the evolving studio market and the complexities surrounding financing for such assets. They confirmed ongoing discussions with lending partners to determine the most viable path forward. This situation arises after Hackman Capital aggressively expanded its studio portfolio over the past decade, accumulating a vast network of over 145 soundstages across North America, the United Kingdom, and Ireland by 2024. Their strategy aimed to integrate ownership with operations, positioning themselves as a comprehensive service provider for film and television production.
However, the landscape shifted dramatically in 2022 when streaming platforms began prioritizing profitability over subscriber growth. This was further exacerbated by the dual strikes involving writers and actors, coupled with budget tightening across major studios. These factors led to a significant slump in production in Los Angeles, reaching a historic low by the end of 2025. Television show filming, traditionally a cornerstone of regional production, saw a decline of more than 50 percent compared to the five-year average.
Consequently, Hackman Capital is likely to lose control of Television City, which it acquired in 2019 for $750 million. This follows the prior divestment of Radford Studio Center and Kaufman Astoria Studios in New York. As of February, the remaining balance on Television City stood at $337.5 million. The decision by lenders to sell the note typically suggests a breakdown in renegotiations with the borrower. Rick Caruso, owner of the adjacent shopping center The Grove, is considered a potential buyer, having previously shown interest in the property. Any acquisition would likely necessitate a partnership with a soundstage operator, given Television City's status as a cultural landmark.
Furthermore, Manhattan Beach Studios, purchased by Hackman in 2019 for $650 million, is attracting offers subsequent to Deutsche Bank's notice of default in June. Despite an abundance of available soundstages in Los Angeles, the proximity of Manhattan Beach Studios to the defense industry hubs of El Segundo and North Orange County could enhance its value. The industrial entity that has made an offer reportedly does not intend to operate the soundstages, suggesting a potential repurposing of the site.
The current climate underscores a challenging period for entertainment real estate, with Hackman Capital Partners facing substantial pressure to navigate its considerable debt and adapt to a changing industry. The future of these iconic studio properties remains uncertain, reflecting broader shifts in content production and investment within the media landscape.
