The lenders on Hackman Capital Partners' Manhattan Beach Studios are not selling a loan. They are selling time.
Deutsche Bank AG and Kennedy Wilson have put the $240 million mortgage on the 15-soundstage campus up for sale, marketing the property not as a struggling studio asset but as a prime site for aerospace and defense technology manufacturing. Cushman & Wakefield Vice Chair Kevin Donner told Bloomberg, There's never been a more perfect site for advanced manufacturing.
The marketing pivot is revealing. The lenders are not trying to convince the market that Hackman's business plan will work. They are trying to convince a buyer that the asset's highest and best use has changed. That is a different argument, and it exposes the central tension in this transaction: the clock on the existing capital stack has run out, and the lenders are racing to find a new narrative before the asset loses more value.
Hackman bought Manhattan Beach Studios in 2019 for $650 million. The property became part of a large portfolio of studio real estate that has struggled as interest rates rose and the entertainment industry weathered strikes and structural changes. Lenders filed a notice of default in June. Another Hackman property, Radford Studio Center in Studio City, was repossessed by lenders led by Goldman Sachs and is slated to sell to Netflix at a large discount.
Hackman has not handed Manhattan Beach Studios back yet. It is in lease negotiations with more than four potential new tenants, a representative told Bloomberg, adding that lenders are also interested in financing the site. But the loan sale suggests that the lenders are not waiting to see whether those leases materialize. They are monetizing their position now, transferring the risk of the lease-up timeline to a buyer who can afford to wait.
That is the capital markets signal underneath the headline. The lenders are not selling because the asset is worthless. They are selling because time has become the most expensive input in the capital stack. Every month that the property sits without a stabilized income stream, the carrying cost of the debt compounds. The lenders have decided that the cost of holding the loan through a multi-year repositioning exceeds the discount they will take by selling it today.
The South Bay submarket has been a magnet for defense tech and aerospace companies. Raytheon, Northrop Grumman, and SpaceX have a presence there. These tenants accounted for 11% of new industrial real estate leases since the start of 2025, according to Newmark. That demand is real, but it is not studio demand. It is manufacturing and R&D; demand. Converting a soundstage campus into an advanced manufacturing facility requires capital, time, and entitlements. The lenders are selling the loan to someone who can underwrite that conversion timeline.
For the buyer of the mortgage, the math is straightforward. They acquire the debt at a discount to face value, giving them a lower basis on the collateral. They can then either work out a consensual transfer with Hackman or foreclose and take control of the asset. Either path gives them time to execute the repositioning without the pressure of a maturing loan or a default notice. The buyer is not buying a studio. They are buying a clock that has been reset.
For Hackman, the loan sale is another chapter in the unwinding of the post-2021 studio capital stack. The company's portfolio was built on the assumption that streaming demand would keep soundstages full and valuations rising. That assumption broke when interest rates rose, the Writers Guild and SAG-AFTRA strikes halted production, and studios cut content spending. Hackman is now negotiating leases and trying to hold on, but the lenders have already moved on.
The transaction matters for the broader CRE market because it illustrates a pattern that is becoming more common: lenders are not waiting for maturity to resolve distressed loans. They are selling the debt mid-cycle, transferring the time risk to specialized investors who can hold through a repositioning. This is not a fire sale. It is a liquidity trade. The lenders are paying a price to get the asset off their books and redeploy capital into loans with shorter paths to stabilization.
For owners with maturing loans on assets that need repositioning, the lesson is uncomfortable. The market is not rewarding patience. It is rewarding structure. If your business plan requires three years of lease-up and your loan matures in 12 months, the capital stack will break before the leases arrive. The lenders will sell the time you thought you had.
The Manhattan Beach Studios loan sale is not proof that studio real estate is dead. It is proof that the cost of waiting has exceeded the value of the asset in its current form. The next buyer will not be betting on a studio recovery. They will be betting that they can convert the asset into something the market needs now, not something it might need later.
Time is the asset being traded. The lenders are selling theirs. The question is who has the capital to buy it.