- A $1.1B CMBS loan backed by Hudson Pacific and Blackstone studio assets in Hollywood, including Netflix-anchored leases, has moved into special servicing days before maturity, per Bisnow.
- The special servicer and borrowers agreed on a short-term and longer extension, while leasing momentum and rent growth have improved at select HPP properties.
- The deal highlights ongoing refinancing risk for studio and office owners, even at high-occupancy trophy assets, as the post-pandemic capital markets reset continues.
Hollywood Studios Face Maturity Pressure
Hudson Pacific Properties (HPP) and Blackstone face a $1.1B refinancing hurdle as Hollywood’s CRE market evolves. Bisnow reports the CMBS loan matures on August 9. It backs the Sunset Studios portfolio, including Sunset Gower, Sunset Las Palmas, Sunset Bronson, and the Netflix-leased Icon, Cue, and Epic offices. The loan entered special servicing, showing that even premier assets face refinancing pressure. HPP CFO Harout Diramerian said the partners secured a short-term extension while finalizing a longer-term deal. However, he shared few additional details.
The portfolio remains 95.5% leased, with Netflix committed through 2031. Even so, higher borrowing costs and shifting tenant strategies complicate refinancing. The borrowers continue negotiating with the special servicer. Their situation reflects broader refinancing pressure across properties with large 2026 maturities.
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Debt Maturities Catch Up With Studio Owners
The loan entered special servicing days before maturity, highlighting growing stress across legacy CRE loans. HPP carries roughly $566M of the debt. Blackstone holds the remaining balance. The collateral includes trophy Hollywood studios and adjacent Class A offices. Those properties historically attracted major tenants like Netflix. Today, lenders also weigh production trends and capital allocation.
Executives offered few details during the earnings call. They confirmed negotiations with the servicer remain ongoing. The Sunset portfolio remains healthy operationally. Studio stages sit 74.6% leased, while offices remain nearly full. Still, higher rates and maturing debt continue pressuring ownership.
LA Studios’ Occupancy Remains Strong, But Headwinds Persist
LA’s soundstage market remains relatively healthy compared with other coastal markets. HPP President Mark Lamas said the three Sunset studios remain 95.5% leased. Netflix anchors the portfolio with a 722K SF lease through 2031. The streaming giant also continues expanding its physical footprint, reinforcing its long-term investment in entertainment real estate. Meanwhile, HPP continues replacing recent vacancies, including space vacated by a PayPal subsidiary. The company has backfilled about 80% of that space.
Recent leasing also supports demand. HPP signed an 894K SF lease with San Francisco public agencies. During the quarter, the company completed 1.3M SF of new and renewal leases. New deals represented 61% of total activity. Still, leasing varies by submarket. The Westside continues gaining momentum. Hollywood and the Arts District face more tenant turnover.
Why It Matters
The Sunset Studios refinancing reflects broader stress across the US CRE debt market. MSCI estimates nearly $2.81T of commercial real estate debt matures between 2025 and 2027. Office and specialized assets, including studios, represent a significant share. Owners now refinance low-rate legacy loans into a much higher-rate environment.
The HPP-Blackstone portfolio entered special servicing despite strong occupancy and long-term Netflix leases. That outcome shows lenders now prioritize capital structure and future cash flow certainty. Netflix’s lease runs through 2031, providing near-term stability. However, HPP has not confirmed longer-term commitments. Meanwhile, stronger office leasing elsewhere shows financing remains available for select assets.
Entertainment labor disruptions have eased following union agreements. HPP expects production activity and occupancy to improve further. Tax-credit-supported projects should also support demand. Still, capital access will determine which owners navigate the next refinancing wave successfully.
What’s Next
Hudson Pacific and Blackstone continue documenting a longer-term extension after securing a 30-day runway. Both companies must also navigate changing studio demand and ongoing questions around major tenants like Netflix. HPP’s Quixote business continues reducing losses. Studio occupancy also increased 180 basis points from the previous quarter.
The next milestone centers on refinancing execution. HPP must convert stronger leasing into sustainable financing terms. Otherwise, more trophy studio portfolios could enter special servicing as debt maturities accelerate through 2027.
