Buyers select Raleigh studios over Sony's Culver City site.

Shamrock Holdings of California Inc. has agreed to sell its 584,000-square-foot Raleigh Studios Manhattan Beach in what would be the first sale of major studio property in more than a dozen years.

The deal, which a source familiar with the market said was valued at about $120 million, was struck with a group that includes Victor Coleman, president of Arden Realty Inc.

The transaction is expected to close next month, reduces the pool of buyers for Sony Corp.'s historic Culver Studios by one. Still, Sony is close to finalizing a buyer for the Culver City site.

The group buying the Shamrock property at 1600 Rosecrans Ave. had been among the handful of bidders for Culver Studios, according to the source. The Sony property, at 9336 W. Washington Blvd., which includes 300,000 square feet of studio and office space, has been on the market for nearly two years. Packaged with the fully occupied 150,000-square-foot office building at 9050 W. Washington Blvd., Culver Studios could also sell for $120 million, the source said.

The activity points up the awkward intersection of the real estate and film production industries in Southern California, where the premium generally associated with commodities is flipped on its head.

Rather than jumping when one of the few studio properties in the nation's busiest production community comes on the market, investors have largely shied away. Manhattan Beach and Culver are the first major studio sites to hit the market since Sony bought the 17-acre Culver Studios site from Gannett Co. Inc. in 1991 more than $75 million.

The resistance is traced to both the specific uses for the sites and the ongoing struggle to retain production, which has been increasingly lured to less expensive locations in the U.S. and Canada.

That's a big change from 1997, when the backlog in demand for soundstages prompted Shamrock to develop the $95 million Manhattan Beach Studios on 22.5 acres of old TRW Inc. property.

By the beginning of construction, Shamrock had signed what was then known as Twentieth Century Fox Film Corp. to leases for five sound stages. Raleigh leased the nine remaining sound stages in mid-1998.

Raleigh Studios' lease expires this summer and has yet to be renewed. George Rosenthal, chairman of Santa Monica-based Raleigh Enterprises, which operates a second studio facility in Hollywood, declined comment.

The principals in the deal for the Manhattan Beach site declined comment on their interest in or plans for the property.

Brooke Lauter, spokeswoman for L.A.-based Arden, confirmed Coleman's stake in the deal, calling it "a small percentage." Coleman could not be reached for comment.

Peter Apple, managing director at Littleton, Colo.-based mortgage bank Riverstone, which is financing the deal, confirmed that the group has entered into an agreement with Shamrock, the Burbank-based investment arm of the Roy Disney family.

"A partnership of which Victor and other folks are small partners have the project in contract," said Apple. He declined to comment on the price or when the deal would close.

Both studio properties were said to be near deals last summer. Vancouver Film Studios was set to buy Manhattan Beach Studios for $115 million. Among those bidding for the Culver Studios were Hertz Investment Group and a partnership that included developer Ira Smedra and Ray-Art Studios of Canoga Park. Both deals fell apart, and Ray-Art has since sold its Warner Center facility to apartment developer Archstone-Smith Trust for an undisclosed price.

Carl Muhlstein, senior director at Cushman & Wakefield Inc. with the listing on the Sony property, declined comment. Sony officials could not be reached.

Gannett, publisher of USA Today, had owned the property for about five years and invested a reported $25 million in upgrades. Its first buildings were constructed in 1920 as Thomas H. Ince Studios, and served as the setting for such famous scenes as the burning of Atlanta in "Gone With the Wind."

Raleigh Studios Manhattan Beach is home to writer/producer David E. Kelley's "The Practice."

With its future in Manhattan Beach uncertain, Raleigh and Canadian partner Ingenium Group submitted proposals last month to the city of Toronto to redevelop a 30-acre industrial site along Lake Ontario.

Buying an interest in the studio site allows Coleman to invest in local real estate without competing directly with Arden, a real estate investment trust that specializes in buying or developing office properties. Coleman and Richard Ziman, chairman and chief executive of Arden, are both investors in Rexford Industrial LLC, which invests in Southern California industrial properties and just broke ground on a 240,000-square-foot industrial complex in the City of Industry.

Staff Reporter RiShawn Biddle contributed to this story.