Lenders are shopping the $240-million mortgage of Manhattan Beach Studios to investment firms as an aerospace and defense manufacturing facility. This move comes after property owner Hackman Capital Partners defaulted on the loan for the 22-acre campus, whose soundstages and backlot previously built the worlds of “The Mandalorian,” “Avatar,” and “The Avengers.” According to Mike Condon, executive vice chair at Cushman & Wakefield, the transition reflects a broader economic shift in Los Angeles where local film and television production slumps through an industry downturn while space tech booms.
Repurposing Production Facilities for Aerospace Start-ups
Manhattan Beach Studios sits within the South Bay’s supply-constrained industrial zone, making it a prime opportunity for reuse by fast-growing aerospace start-ups. According to Mike Condon, one of the realtors pitching the property, MBS represents a perfect storm due to physical aspects like high clear height, heavy power, and office space that these companies need. Colliers reported that the South Bay industrial real estate market spans roughly 201 million square feet in the first quarter of this year. Condon estimated that only about a fourth of that space can be repositioned for advanced manufacturing, which demands existing power service, parking, and clear height. Available facilities checking those boxes remain few and far between.
Aerospace companies vying for South Bay land tend to rent rather than buy property. Kidder Matthews Inc. reported that the region accounted for most of L.A.’s largest industrial leases signed in the first three months of 2026. This leasing activity includes a 205,000-square-foot space in El Segundo’s Mattel Design Facility that went to space research company Varda Space Industries Inc. Condon noted that tenants stay cash-constrained and focused on business reinvestment, meaning pitching efforts target investors who will reposition products to lease out to those tenants.
Did You Know? Before the local production scene entered its downturn, Hackman Capital Partners purchased the Manhattan Beach Studios campus in 2019 for $650 million during an acquisition spree that established the firm as the world’s largest independent owner of studio properties.
The Portfolio Strain and Studio Conversions
MBS is one of several troubled studio properties in Hackman’s portfolio looking for an out. Weak soundstage occupancy in recent years has driven a string of defaults on Hackman-owned production facilities. While the historic Radford Center in Studio City was reportedly sold to Netflix Inc. at a heavy discount and will likely continue producing movies and television shows, repurposing is emerging as a compelling value-add move for other properties.
Kevin Donner, vice chair at Cushman & Wakefield, explained that soundstages function essentially as big boxes designed for acoustic and lighting control, making manufacturing their obvious alternate use. However, Donner noted that not all studios fit the needs of heavy manufacturing tenants. MBS features 15 soundstages and stands out among other properties coming online due to its flexible zoning and proximity to Los Angeles’ aerospace and defense manufacturing hub. Donner contrasted MBS with Radford, noting that the zoning on Radford proved more restrictive, and mentioned that properties in Glendale, the Arts District, or other areas allow for considerably less flexibility.
Expert Insight: The intersection of a prolonged entertainment industry slump and an exploding South Bay space sector illustrates a dramatic structural realignment of Los Angeles commercial real estate. As studio mortgages default and lenders seek alternative revenue paths, high-power industrial assets previously dedicated to cinematic backlots are finding new purpose in heavy advanced manufacturing.
Frequently Asked Questions
Why is Manhattan Beach Studios being pitched to aerospace firms?
Lenders are shopping the studio’s $240-million mortgage as an aerospace and defense manufacturing facility after owner Hackman Capital Partners defaulted on the loan, coinciding with a slump in local film production and a boom in the space technology sector.
What physical features make the campus attractive to manufacturers?
According to realtors, the production buildings offer high clear heights, heavy power service, parking, and office space, which fulfill the requirements of fast-growing aerospace start-ups.
How do these aerospace tenants typically acquire real estate?
Aerospace companies generally rent rather than buy property because they are cash-constrained and focused on reinvesting in their businesses, prompting investors to acquire and reposition the real estate for leasing.
What does the shift from soundstages to aerospace manufacturing mean for the future of Los Angeles real estate?