Home / Companies / News /  CBS Studio selling for $1.8 bn as demand soars for show-business real estate

CBS Studio selling for $1.8 billion as demand soars for show-business real estate


Hackman Capital and Square Mile have winning bid for complex where classic television shows such as ‘Seinfeld’ were shot

A venture of two real-estate firms has agreed to pay more than $1.8 billion for the historic CBS Studio Center in Los Angeles, say people familiar with the matter, the latest deal in the red-hot studio sector.

Hackman Capital Partners and Square Mile Capital Management LLC had the winning bid, beating out about a dozen or so other parties, these people said. The price tag was also about $500 million more than what the studio was projected to fetch three months ago when it was put up for sale, according to these people.

The two sides are expected to sign a contract soon, these people said, and the deal isn’t yet final.

The higher-than-expected price tag shows how demand for limited studio space is rising. Classic network-television programs such as “Seinfeld," “The Mary Tyler Moore Show" and “Gunsmoke" were shot at the CBS complex. But new demand is being fueled in large part by companies such as Inc., Netflix Inc. and Apple Inc. competing to create new streaming content.

Real-estate investors are getting in on the action by buying the sound stages, office space and other real estate tied to show business.

“We’re seeing the whole sector becoming more institutionalized," said Stephen Somer, managing director at Eastdil Secured LLC. “Historically the traditional user—the Comcasts, the Disneys, the Warners—owned these."

The real-estate business of private-equity giant TPG said last week that it was purchasing the Cinespace Studios in Chicago and Toronto, which have a total of 56 stages. TPG paid $1.1 billion, according to people familiar with the matter.

Content creation is booming partly because of strong demand from homebound viewers during the pandemic. Numerous new streaming services have gotten into the business in recent years, including Disney+, Paramount+ and NBCUniversal’s Peacock.

Meanwhile, some of the largest production companies have been selling their studio complexes, figuring it is more efficient to use the cash for other purposes and lease the space they need. For example, in 2019, CBS Corp. sold its Television City complex in Los Angeles for $750 million, also to Hackman Capital.

CBS merged with Viacom in late 2019 and last summer the merged company put CBS Studio Center up for sale. The complex, which includes 18 sound stages and more than 210,000 square feet of office space, has been home to shows such as “Entertainment Tonight," “SEAL Team," “Parks and Recreation" and “Big Brother."

At the time CBS Studio Center was put up for sale, market participants expected it to go for $1.2 billion to $1.3 billion.

Other large institutions that have made big bets on entertainment real estate include Blackstone Inc., which in 2020 purchased a 49% stake in a venture that owns studio lots and office buildings in Hollywood. TPG Real Estate has agreed to pay €65 million, equivalent to $74 million, to buy a stake in Studio Babelsberg AG, in Germany, according to people familiar with the matter.

The Hackman and Square Mile venture this year also bought Kaufman Astoria Studios in New York City and Sony Pictures Animation Campus in Culver City, Calif.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Edit Profile
Get alerts on WhatsApp
My ReadsRedeem a Gift CardLogout