Streaming giant Netflix Inc. (NASDAQ:NFLX) is exploring a discounted acquisition of a historic Los Angeles studio lot as it shifts toward owning production infrastructure amid a changing market.

Netflix Eyes Discounted Studio Acquisition

Netflix has entered talks to buy Radford Studio Center after lenders led by Goldman Sachs Group, Inc. (NYSE:GS) repossessed the property.

Sources told Bloomberg on Tuesday that the final price is still under discussion, but could come in at less than one-third of its $1.85 billion 2021 valuation.

The deal has not yet closed.

Netflix held $12.26 billion in cash and equivalents as of March 31, 2026.

Market Downturn Creates Buying Opportunity

The potential purchase follows a sharp decline in Los Angeles studio real estate values, driven by higher interest rates and reduced production after the 2023 writers' and actors' strikes.

Hackman Capital Partners, the previous owner, defaulted on $1.1 billion in debt and handed the asset to lenders.

Data from FilmLA shows soundstage occupancy dropped to 62% in the first half of last year, highlighting weakened demand.

Strategy Shift Toward Owned Infrastructure

Netflix is considering consolidating its real estate footprint as it moves away from leased properties, including spaces rented from Hudson Pacific.

The company has increased investments in studio assets, including a $1 billion production facility in New Jersey.

With $12.3 billion in cash and a recent $2.8 billion breakup fee from the Warner Bros Discovery Inc. (NASDAQ:WBD) bidding process, Netflix appears positioned to capitalize on distressed assets like Radford.

Guggenheim's Michael Morris said Netflix remains a Buy, emphasizing strong long-term growth despite recent stock volatility.

Valuation Supports Long-Term Growth Outlook

Morris explained that the recent pullback reflects high expectations, noting more than 80% of investors had anticipated a margin guidance increase that did not materialize.

He added that the stock still offers an attractive valuation based on its multi-year growth outlook and includes additional "option value."

Leadership Stability and Strategy Drive Confidence

He said Netflix continues to meet its long-term targets, describing the latest quarter as a "beat and maintain," and expects double-digit revenue growth, high-teens operating profit growth, and over 20% earnings growth through the decade.

Morris also acknowledged leadership changes could impact sentiment in the short term. Still, he said, continued leadership from Ted Sarandos and Greg Peters, along with evolving strategies like advertising and M&A, supports the company's long-term trajectory.

NFLX Price Action: Netflix shares were up 0.67% at $93.20 during premarket trading on Wednesday, according to Benzinga Pro data.

Image via Shutterstock