Exclusive: Hackman Capital Partners Could Pay $700 Million for 22-Acre Manhattan Beach Studios Site, Business
JUNE 07, 2019|RANDYL DRUMMER & JACQUELYN RYAN
Hackman Capital Partners is in talks to buy a Manhattan Beach, California, production campus as well as some or all of a global production management and services company on the property for as much as $700 million, potentially catapulting the developer and investor into the ranks of the biggest private owners of Los Angeles film and television studio production real estate.
The firm is discussing buying the 22-acre complex called MBS Media Campus, once known as Manhattan Beach Studios, as well as at least some of the MBS Group, which provides studio services and management in locations from Hawaii to England, from Washington, D.C.-based private equity firm The Carlyle Group, according to three sources familiar with the deal.
The purchase would follow Hackman's high-profile acquisitions of CBS Corp.'s historic Television City studios and sound stage in Los Angeles, the nation's entertainment capital, in late 2018 and its purchase of Culver Studios in nearby Culver City in 2015. The Carlyle Group declined to comment and Hackman did not return emails and phone calls on the deal, which has not closed, is subject to changes and could even be scrapped.
Carlyle paid $150 million to buy the Manhattan Beach property that includes 15 sound stages and more than 280,000 square feet of production offices at 1600 Rosecrans Blvd. near South Aviation Boulevard from Los Angeles-based investment manager Oaktree Capital Management LP in June 2007, according to CoStar. MBS Media Campus also operates multiple Vancouver satellite studio operations. The Manhattan Beach property is home to the offices of director James Cameron's production company Lightstorm Entertainment.
The current deal being negotiated is said to include some if not all of the MBS Group businesses, which include lighting and other studio and production operations with sound stages, production facilities, offices and storage, according to the sources.
Among the potential acquisitions is MBS3, the largest provider of studio management and equipment support in the United States and provides services for more than 25 locations around the world and supports more than 160 sound stages in nine states and four countries, with locations in California, Georgia, Florida, Hawaii, Louisiana, Mississippi, New Mexico, New York, British Columbia, Ontario, and the United Kingdom.
Manhattan Beach Mayor Pro Tem Richard Montgomery said no buyer has approached the city about the property yet but would need to work with the city to procure the appropriate approvals.
The Manhattan Beach studio has been home to the production of several blockbuster movies and television shows, including Marvel Studios’ "Thor" and "Iron Man 2," both sequels to James Cameron's "Avatar," "America’s Funniest Home Videos," "Ally McBeal," "The OC" and "Jane the Virgin." More recently, the studio property is playing a part in the rapid evolution of competitive video gaming , known as esports.
OGN, a South Korean broadcast company and subsidiary of entertainment and retail company CJ E&M, last December opened a 35,000-square-foot, 500-seat arena to produce live esports events and other content on a lot at MBS Media Campus, a venue that OGN describes as as the largest e-sports venue on the West Coast, with the capacity to host live battle royale events with all players in the arena instead of playing remotely in matches broadcast via a live stream.
Hackman Capital has been involved in more than $3.5 billion in real estate investments, including ownership of 400 buildings totaling more than 35 million square feet through affiliates, across 41 states since Michael Hackman founded the firm in 1986. The company has acquired more than $1 billion in real estate over the past four years ranging from Los Angeles movie studios to a refrigerated distribution center in a former Budweiser warehouse in Chicago.
The firm paid $750 million for CBS Television City in Los Angeles's Fairfax District, which was announced last December in one of the largest commercial property purchases in Los Angeles history.
Hackman paid $85 million in 2015 for Culver Studios, a century-old movie and television studio and filming site for "Gone With the Wind" and other productions. Retail giant Amazon's fast-growing entertainment division, Amazon Studios, has leased up that property and plans to move its headquarters along with affiliates IMDb, Amazon Video and World Wide Advertising from smaller quarters in Santa Monica.
Hackman recently broke ground on five office and production buildings and two parking structures totaling 575,000 square feet at Culver Studios, for Amazon Studios, which has leased a total of 530,000 square feet in a doubling of its footprint at the site.
iPhone maker Apple's entertainment and music divisions plan to move into 85,000 square feet at Hackman's 5500 W. Jefferson Blvd. project in Culver City, which involves the transformation of a 1930s-era warehouse into ultra-modern creative office space.
Hackman has plans to convert 30 acres of a former Northrup Grumman aerospace plant in El Segundo, California, into a 550,000 square-foot creative office campus, where online streaming service Hulu has previously toured for space, according to a source familiar with the property.
Artitle by CoStar