Warner Bros. Studio Development Lands $480M Loan
By Greg Cornfield September 8, 2023 2:34 pm
reprints
Worthe Real Estate Group and Stockbridge have completed a deal to acquire studio space in the entertainment industry hub of Burbank, Calif., and are set to begin a major $500 million redevelopment thanks to new financing.
The firms purchased the Warner Bros. Ranch for $175 million. Athene Annuity and Life Company, a subsidiary of Apollo Global Management (APO), provided a $480 million loan, records show. CoStar first reported on the transaction, but not the financing.
On the 30-acre lot at 3701 West Oak Street, Worthe plans 926,000 square feet of new construction with 16 soundstages, with a commissary, mill space and a 320,000-square-foot office complex. The developers will then lease the space back to Warner Bros. in 2025.
It’s all part of a larger deal announced in 2019 between the developers and the entertainment giant valued at $1 billion, in which Worthe and Stockbridge acquire the Ranch studio as well as three other properties in Burbank. Warner Bros. expanded the 800,000-square-foot office project called Second Century designed by Frank Gehry at the southernmost part of the famous 35-acre Burbank Studios lot.
It’s a precarious time for studios with writers and actors on a historic strike. Warner Bros. Discovery said labor disputes could cut profits by $300 million to $500 million this year, according to a SEC filing this week. But once new contracts are signed, a backlogged flood of filming is expected to commence to make up for lost time.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
