Warner Bros.’ Iconic Burbank Studios Traded Back for $375M
By Greg Cornfield July 15, 2024 2:55 pm
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Worthe Real Estate Group, QuadReal Property Group and Stockbridge Capital Group have acquired the iconic Burbank Studios as part of a yearslong deal with Warner Bros. Discovery.
The three companies paid $375 million for the 27-acre film studio campus in the Burbank Media District in Southern California, property records show. Representatives announced the deal Monday but did not disclose the value of the sale.
The Burbank Studios along West Alameda Avenue — which was the former headquarters of NBC Entertainment — spans 685,000 square feet and includes eight existing soundstages, production facilities and creative office space.
It’s also entitled for further development of soundstages and production space. The first of two phases will include five new soundstages.
Warner Bros. provided $281.3 million in seller financing as part of the transaction and will be the primary tenant of the property by way of sale-leaseback.
The same owners sold the property to Warner Bros. last year for $300 million in a complex deal that included the entertainment giant leasing the adjacent 800,000-square-foot Second Century office, which was developed by Worthe and Stockbridge and designed by starchitect Frank Gehry. Earlier this year, the developer secured a $475 million fixed-rate mortgage led by Wells Fargo and Morgan Stanley for Second Century.
The latest sale is another milestone part of a larger deal announced in 2019 between the developers and Warner Bros. that, at the time, was valued at $1 billion. It also includes Worthe and Stockbridge acquiring The Ranch Lot in Burbank, which is already undergoing $500 million redevelopment and will be leased to Warner Bros. for 926,000 square feet of offices and soundstages.
Jeff Worthe, president of Worthe Real Estate, said the acquisition is another sign of their confidence in the partnership with Warner Bros. Discovery and in the Burbank Media District.
“We never really wanted to sell the Burbank Studios,” Worthe told Commercial Observer. “We had to sell it in order to buy The Ranch Lot, which we really wanted, too. [Warner Bros. Discovery] ultimately decided it’s better if we operate it and they stay on as a tenant. … We’re big believers in Burbank and have been since the late 1970s.”
Development at Ranch Lot is on schedule to open in 2025, he added.
UPDATE: This story has been updated to include commentary from Jeff Worthe.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
