Lenders made a move on Michael Hackman’s Television City.
The Deutsche Bank-led lender syndicate filed a notice of default and election to sell under deed of trust on the Los Angeles studio. The late-June notice claims Hackman Capital Partners owes $357 million.
Neither Hackman nor Deutsche Bank immediately responded to a request for comment.
In May, Bloomberg reported that the group of lenders was recruiting a real estate broker to market the production lot in L.A.’s Fairfax district. The Real Deal later reported the consortium chose CBRE to shop the loan.
The record makes it all official for all parties involved, and whatever the next step is, the price tag probably won’t compare to what Hackman paid. Hackman purchased the production campus that has soundstages and offices on Beverly Boulevard for $750 million in 2019.
A similar situation occurred earlier this year — and is still playing out. Goldman Sachs led a takeover of Radford Studio Center after Hackman defaulted on a billion-dollar mortgage, then it shopped the lot. Now Netflix could close on it soon at a price tag estimated around $400 million. Hackman purchased the Studio City real estate for almost $2 billion in 2021.
There could be more defaults and lender-takeovers to come.
Hackman is in default on MBS Media Campus, or Manhattan Beach Studios, and owes about $258 million. A Cushman & Wakefield broker put out a brief brochure marketing the $240 million loan. Plus, the company defaulted on a $100 million loan that backed what was a Sony campus in Culver City.
“We have a couple deals that we just made mistakes on, and we’re going to lose a lot of money on those properties, but that happens,” Hackman said during a June conference at the Lot at Formosa, before the Television City notice of default was filed. “We’ve accepted it, and now we’re moving on.”
It is unclear which deals and what properties he was referring to. But the company’s distress shows that it isn’t an easy time for studio owners because the business of Hollywood isn’t what it used to be. The streaming wars are over; dual actors’ and writers’ strikes brought disruptions in recent years; the media industry is amid a wave of consolidation; and it’s often much cheaper to make movies and shows in various markets besides Hollywood. That has all meant much fewer shoot days in L.A., so there is more production space than needed.
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