Longest Continually Operating Studio Globally Lands $165M Refi
Hackman Capital Partners and Affinius Capital have struck a $165 million refinancing deal for Raleigh Studios in Los Angeles.
The new loan, provided by Barclays and Wells Fargo Bank, carries a three-year term, with a seven percent interest-only fixed rate, according to a report from the Commercial Observer.
Of the funds, $135 million will be used to eliminate existing debt and $26.9 million will be restored to Affinius and Hackman.
The 314,940 square foot Hollywood studio has remained 100 percent leased since 2018. Most of the space (94 percent) is occupied by Netflix, which is amid a 10-year lease on the property, according to CO. The deal includes three percent annual rent hikes, requires the tech giant to spend a minimum amount on equipment and lighting each year and does not contain termination options.
According to Raleigh Studios, it's one of the oldest "continually operating" studios globally. The asset consists of 135,349 square feet of support and office space, as well as 13 sound stages. The site at 5300 Melrose Avenue has hosted major film stars, including Charlie Chaplin, Al Pacino, Mary Pickford and Douglas Fairbanks.
In addition to Hackman and Affinius, Raleigh Enterprises also owns some of the property. In fact, Raleigh Enterprises has retained at least some equity in it since 1979 and spent $40 million in expanding the asset's facilities and the lot.
Los Angeles' office sector has continued to struggle with vacancy. In the first quarter, the category's 24.2 percent rate marked another historic high, according to a CBRE report. Also, net absorption tanked to -1.08 million square feet as tenant demand remains soft.
Source: GlobeSt/ALM