ViacomCBS reaches deal to sell Studio City lot for $1.85 billion
ViacomCBS has reached a $1.85-billion deal to sell the CBS Studio Center complex in Studio City — home to such landmark TV shows as “Seinfeld,” “The Mary Tyler Moore Show,” “Gilligan’s Island” and “It’s Always Sunny in Philadelphia.”
Real estate investors Hackman Capital Partners and Square Mile Capital Management teamed up to win competitive bidding for the 55-acre Radford Avenue property.
The staggering price tag underscores the value — and scarcity — of TV soundstages in Los Angeles as content producers scramble for space to shoot TV shows and movies to stock their streaming services. ViacomCBS disclosed its plan to sell the property last summer.
The deal, announced Tuesday, represents one of the largest ever real estate transactions for a TV studio complex in Los Angeles. In addition to the real estate assets, CBS will turn over its lucrative studio operations business, which includes stage rentals, facilities management and production support services on the lot.
“We’re honored to have been selected as the new stewards of CBS Studio Center, one of the most celebrated and successful studios in Los Angeles,” Michael Hackman, the founder and chief executive of Hackman Capital Partners, said in a statement.
“The studio has been a hit maker from the days of ‘Gunsmoke,’ ‘Mary Tyler Moore’ and ‘Seinfeld,’ and we’re thrilled to continue our ongoing relationship with ViacomCBS to service its many successful shows currently filmed on the lot,” Hackman added.
Over the years, the Radford lot has been home to such shows as “Seinfeld,” “Gilligan’s Island,” “Mary Tyler Moore” and “Big Brother.”
Hackman Capital Partners is one of the world’s largest providers of entertainment production facilities. It currently owns four studios in the L.A. region, along with facilities in New York, New Orleans, London and Scotland. In 2019, Hackman Capital purchased CBS’ other sprawling complex in Los Angeles — the 25-acre Television City that sits adjacent to the Original Farmers Market and the Grove — for $750 million.
Hackman Capital recently announced plans for $1.25 billion worth of improvements to Television City that will add soundstages, production support facilities and offices for rent. The company’s plans for the Studio City complex have yet to be disclosed.
Hackman Capital also owns the Manhattan Beach Studios Media Campus and the historic Culver Studios in Culver City, where “Gone With the Wind” and “E.T.” were filmed. Amazon Studios now operates from the site. Earlier this year, Hackman Capital Partners bought the Sony Pictures Animation campus in Culver City.
To pull off the deal for the Radford lot, the privately held Los Angeles-based Hackman Capital entered into a partnership with Square Mile Capital Management, a New York-based real estate and management firm that co-owns all of Hackman’s studios.
CBS’ two L.A.-based television stations, KCBS-TV (Channel 2) and KCAL-TV (Channel 9), are housed at the CBS Broadcast Center on the Radford lot, and the local news operation will stay put as part of a long-term lease-back, ViacomCBS said.
By combining forces in small and medium European markets, the companies appear to recognize the challenges they face in becoming a global juggernaut in streaming.
CBS, which acquired the property from Republic Pictures in the 1960s, will continue to occupy stages and produce content on the Radford lot. At least three CBS-produced shows, “Big Brother,” “Entertainment Tonight” and “The Talk,” will remain on the site.
For 13 years, the Radford property has been the West Coast headquarters of the CBS television network. It intends to lease back office space from the new owners through at least June, CBS Chief Executive George Cheeks said in a memo. The company plans to transition workers to new locations, primarily to ViacomCBS’ office building near the corner of Sunset Boulevard and Gower Street in Hollywood.
CBS Studio Center, just north of Ventura Boulevard, offers 18 traditional soundstages and four other stages. The site also has about 210,000 square feet of production office space and its own mill to provide carpentry services, a paint shop, a commissary and a car wash. It has a backlot with a “Central Park” and a “New York Street” with 11 building fronts, including four brownstones. It also includes simulated residential neighborhoods with a hodgepodge of houses in different architectural styles.
The project to expand production at Television City comes as shortages keep the region’s existing soundstages booked year-round.
CBS sold Television City to Hackman Capital in early 2019. The same year, Warner Bros. agreed to sell its historic North Hollywood Way facility in Burbank, known as the Ranch lot.
The new owners of the Ranch lot will redevelop the property with 16 new soundstages, part of a wave of studio development in recent years to add soundstages and production facilities to meet demand from old and new entertainment creators. In early November, NBCUniversal said it would build eight new stages as part of a major development to boost production at its famed Universal Studios lot.
Ever since Viacom and CBS merged nearly two years ago, the New York company has been casting off signature CBS properties in an effort to generate cash. Last summer, it sold CBS’ iconic New York skyscraper known as “Black Rock” to a private firm, Harbor Group International, for $760 million. The granite tower in midtown Manhattan, designed by Eero Saarinen, has served as CBS’ headquarters since 1965.
Cheeks, in his memo to staff members, said the Radford lot sale “is part of a strategic plan to consolidate the company’s real estate footprint, bring teams together in centralized locations, and direct proceeds from these sales towards more best-in-class content.”
Most employees should expect to return to Radford “when we return to a mostly hybrid work model, starting Jan. 10, or the designated date determined by your divisions,” Cheeks said in the memo. He noted that most CBS Entertainment, CBS Studios and CBS Media Ventures employees would join other ViacomCBS teams already at the six-story building in Hollywood that was completed in 2016.
The reconstituted company will face stiff headwinds as it scrambles to keep up with larger players, including Walt Disney, NBCUniversal, Netflix, WarnerMedia and Amazon.
A year ago, ViacomCBS also announced a deal to sell its book publishing house, Simon & Schuster, to Bertelsmann’s Penguin Random House for $2.18 billion. But earlier this month, the U.S. Justice Department sued to block that deal on antitrust grounds.
The Radford complex was the very studio lot that gave rise to the name Studio City.
Its sale is expected to close by year’s end. Facilitating the deal for ViacomCBS are real estate brokers Carl Muhlstein and Kevin MacKenzie of JLL, according to a filing with the Securities and Exchange Commission.
“With ViacomCBS maintaining an important presence at the property, we anticipate a smooth ownership transition and many more great years ahead,” said Square Mile Capital Chief Executive Craig Solomon.
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