The City of Culver City has secured the exclusive right to purchase the former Sony Pictures campus, a creative office property previously owned by Hackman Capital Partners. Hackman Capital Partners defaulted on its debt, leading to Fortress Investment Group taking control of the asset.
Fortress Investment Group has declined to comment, and Culver City has not yet responded to a request for information.
The City Council and the Culver City Public Finance Authority have approved a purchase option agreement, as reported by the Culver City Observer on October 1st. The city was previously reported to be in negotiations to acquire the campus located at 9050 Washington Boulevard.
The agreement sets a price of $103 million for the entirely vacant, three-building, 198,000-square-foot campus in downtown Culver City. This price equates to $520 per square foot, assuming the city proceeds with the purchase after due diligence and the price remains unchanged. The city has until late February to make a decision and has submitted a $375,000 deposit. The Culver City Observer indicates that the city is considering redeveloping the campus.
The potential purchase price is lower than the approximately $160 million Hackman Capital Partners paid in 2021 and nearly covers the $104 million in unpaid debt following the default. It also exceeds the $71 million credit bid that allowed the lender to gain control. Fortress acquired the $100 million loan on the campus from Goldman Sachs three years ago and subsequently foreclosed over the summer, becoming the owner.
"After the single, long-term occupant left the office campus, we evaluated multiple leasing and alternative asset strategies, including redevelopment. Ultimately, we determined that putting additional capital into the asset was not in the best interest of our investment," a Hackman representative stated in September, referring to Sony Pictures Animation.
This situation is part of a pattern for Hackman Capital Partners. The company previously defaulted on a billion-dollar loan for Radford Studio Center, which was subsequently lost to a Goldman Sachs syndicate, with Netflix potentially acquiring the iconic production campus at a low price. Hackman is also in default on Manhattan Beach Studios, owing approximately $258 million, and a Deutsche Bank lender syndicate has taken action regarding Television City, claiming Hackman owes $357 million. Brokers have been engaged for these production campuses.
Companies and People Deutsche Bank Fortress Investment Group Goldman Sachs Hackman Capital Partners Netflix Sony Pictures Michael Hackman
