If these movie studio walls could talk, the MBS Media Campus might write a tell-all book on Hollywood’s favorite stars. The owner of its rights would be private equity real estate firms Hackman Capital Partners and Square Mile Capital Management, which purchased the asset and its associated production company, MBS Services, for $650 million last month.
The California industrial building, which hosts sound stages and offices for the TV and movie industry, has seen countless actors walk its grounds – and with 20th Century Fox and Marvel Studios as tenants, more than a few superheroes.
Originally named Manhattan Beach Studios, the facility was destined to attract some of Hollywood’s biggest stars, even before the media studio on 1600 Rosecrans Avenue in Manhattan Beach was completed at an estimated cost of $82 million. Built in 1998 by Shamrock, the private investment vehicle for the Roy E Disney family, it instantly had a deep connection to industry bigshots.
The 22-acre complex offered 15 stages, office space, parking lots and production support facilities – it was one of the largest independently operated studio facilities in the Los Angeles area. Since opening, the media campus has housed many industry heavyweights, including actress Lucy Liu in the late-90s TV series Ally McBeal and Panic Room director David Fincher. It was also the filming site for swashbuckling blockbuster Pirates of the Caribbean.
In 2004, Shamrock sold the industrial building to private equity firm Oaktree Capital Management for approximately $100 million, according to the Los Angeles Times. Washington, DC-based private equity shop Carlyle then took over the asset from Oaktree in 2007 for $150 million with capital from its Carlyle Realty Partners V fund. The firm invested approximately $20 million in upgrades, according to The Wall Street Journal.
By 2011, the MBS Media Campus had caught the attention of James Cameron – director of the 2009 sci-fi hit Avatar – who had his production company Lightstorm sign a five-year lease. Though the production company kept its corporate office in Santa Monica, it moved its entire production team to the 115,000 square feet of soundstage and production office space on the campus. Lightstorm is filming the next two Avatar sequels on the premises and has partnered with Carlyle to improve the facility. The production company and Carlyle planned to invest more than $5 million in improvements, the Los Angeles Times reported. This includes the addition of two gyms (one of which would be reserved for Cameron alone), solar panels, a cafeteria next to the soundstages and a private screening room for Cameron.
Piling on the bonus content
To add further value to the core Manhattan Beach studio asset and boost relationships with blue chip tenants, Carlyle launched production services company MBS Services in 2013 to address its tenants’ needs more broadly across the top production markets. The business provides the resources and infrastructure needed for content production on-location, but also gives entertainment industry customers access to a global network of partner studios.
Today, in addition to production services, the studio offers a variety of amenities for the stars and production crews working there, according to the MBS Media Campus website. These include a masseuse and dermatologist on site. Those in a time crunch can pay for auto-detailing services or helicopter transport. Tenants even have access to a New York streetscape set and a 3-D screening room. All these extras have led to a vastly increased valuation, one that the joint venture between Hackman Capital Partners and Square Mile Capital Management was willing to pay.