Blab Tech
Hackmans Manhattan Beach Studios Mortgage Default Signals Shift Toward Aerospace Repurposing
When a Hollywood studio falls behind, the future may not be in films but in rockets.
Hackman Capital Partners’ failure to meet a $240‑million mortgage on its Manhattan Beach Studios (MBS) campus has turned a 22‑acre former movie set into a prime real‑estate pitch for aerospace and defense manufacturers. The campus, once a playground for high‑profile film and television productions, now sits at the crossroads of Los Angeles’ shrinking local‑production market and a booming space‑tech sector.
MBS houses 15 soundstages, towering clear‑height ceilings, heavy‑duty power infrastructure, and office space—all features that make it an almost ready‑made laboratory for advanced manufacturing. “MBS is kind of a perfect storm because of the physical aspects of the production buildings: high clear height, heavy power,” said Mike Condon, executive vice chair at Cushman & Wakefield. Those same attributes match the needs of aerospace start‑ups that require vast, open spaces with robust electrical service.
The South Bay’s industrial real‑estate market totals roughly 201 million square feet, Colliers reported in its first‑quarter 2026 data. Condon estimates that only about a quarter of that inventory could be repositioned for advanced manufacturing, citing the need for high power, parking, and clear height. Facilities that meet those criteria are scarce, he added.
In the region, aerospace companies usually rent rather than buy property. The first three months of 2026 saw the largest industrial leases signed, including a 205,000‑square‑foot space in El Segundo’s Mattel Design Facility leased by Varda Space Industries. “These tenants are cash‑constrained and focused on reinvesting in the business, so we’re not seeing a lot of them actually acquire the real estate,” Condon said. Most potential buyers are investors who plan to reposition the property and lease it to such tenants.
MBS is one of several troubled studio assets in Hackman’s portfolio. The firm bought the campus in 2019 for $650 million, but weak soundstage occupancy has led to a string of defaults. Other properties, such as the Radford Studio Center in Studio City, were sold to Netflix at a discount, while Television City was sold to Hackman in 2018 and remains in use for film and television.
Soundstages are essentially large, acoustically treated boxes designed for lighting and audio control. Kevin Donner, vice chair at Cushman & Wakefield, noted that “soundstages are essentially big boxes designed for acoustic and lighting control, making manufacturing their ‘obvious alternate use,’ but not all studios fit the needs of heavy manufacturing tenants.” MBS’s flexible zoning and proximity to Los Angeles’ aerospace and defense manufacturing hub make it uniquely suited for repurposing, Donner said. He contrasted it with other studios in Glendale or the Arts District, where zoning restrictions limit conversion possibilities.
The default on MBS’s mortgage reflects a broader economic shift in Los Angeles. Local production has contracted amid an industry downturn, while the space‑tech sector has expanded, creating demand for large, high‑power industrial spaces. Lenders are now exploring the possibility of selling the property to firms that can transform it into a manufacturing facility for aerospace and defense companies.
As of now, the property remains in the hands of lenders who have filed a notice of default. The outcome will depend on whether an investor can secure the $240 million mortgage and reconfigure the campus to meet the needs of aerospace tenants. The situation underscores the growing trend of repurposing former entertainment‑industry facilities for advanced manufacturing in the South Bay.
The current status of MBS is that Hackman Capital Partners has defaulted on the loan, lenders are marketing the property to investment firms, and the campus’s physical attributes make it a strong candidate for aerospace and defense manufacturing. No definitive sale or redevelopment plan has yet been announced.
Hackman Capital Partners’ failure to meet a $240‑million mortgage on its Manhattan Beach Studios (MBS) campus has turned a 22‑acre former movie set into a prime real‑estate pitch for aerospace and defense manufacturers. The campus, once a playground for high‑profile film and television productions, now sits at the crossroads of Los Angeles’ shrinking local‑production market and a booming space‑tech sector.
MBS houses 15 soundstages, towering clear‑height ceilings, heavy‑duty power infrastructure, and office space—all features that make it an almost ready‑made laboratory for advanced manufacturing. “MBS is kind of a perfect storm because of the physical aspects of the production buildings: high clear height, heavy power,” said Mike Condon, executive vice chair at Cushman & Wakefield. Those same attributes match the needs of aerospace start‑ups that require vast, open spaces with robust electrical service.
The South Bay’s industrial real‑estate market totals roughly 201 million square feet, Colliers reported in its first‑quarter 2026 data. Condon estimates that only about a quarter of that inventory could be repositioned for advanced manufacturing, citing the need for high power, parking, and clear height. Facilities that meet those criteria are scarce, he added.
In the region, aerospace companies usually rent rather than buy property. The first three months of 2026 saw the largest industrial leases signed, including a 205,000‑square‑foot space in El Segundo’s Mattel Design Facility leased by Varda Space Industries. “These tenants are cash‑constrained and focused on reinvesting in the business, so we’re not seeing a lot of them actually acquire the real estate,” Condon said. Most potential buyers are investors who plan to reposition the property and lease it to such tenants.
MBS is one of several troubled studio assets in Hackman’s portfolio. The firm bought the campus in 2019 for $650 million, but weak soundstage occupancy has led to a string of defaults. Other properties, such as the Radford Studio Center in Studio City, were sold to Netflix at a discount, while Television City was sold to Hackman in 2018 and remains in use for film and television.
Soundstages are essentially large, acoustically treated boxes designed for lighting and audio control. Kevin Donner, vice chair at Cushman & Wakefield, noted that “soundstages are essentially big boxes designed for acoustic and lighting control, making manufacturing their ‘obvious alternate use,’ but not all studios fit the needs of heavy manufacturing tenants.” MBS’s flexible zoning and proximity to Los Angeles’ aerospace and defense manufacturing hub make it uniquely suited for repurposing, Donner said. He contrasted it with other studios in Glendale or the Arts District, where zoning restrictions limit conversion possibilities.
The default on MBS’s mortgage reflects a broader economic shift in Los Angeles. Local production has contracted amid an industry downturn, while the space‑tech sector has expanded, creating demand for large, high‑power industrial spaces. Lenders are now exploring the possibility of selling the property to firms that can transform it into a manufacturing facility for aerospace and defense companies.
As of now, the property remains in the hands of lenders who have filed a notice of default. The outcome will depend on whether an investor can secure the $240 million mortgage and reconfigure the campus to meet the needs of aerospace tenants. The situation underscores the growing trend of repurposing former entertainment‑industry facilities for advanced manufacturing in the South Bay.
The current status of MBS is that Hackman Capital Partners has defaulted on the loan, lenders are marketing the property to investment firms, and the campus’s physical attributes make it a strong candidate for aerospace and defense manufacturing. No definitive sale or redevelopment plan has yet been announced.
