Sony Group Corp. plans to sell the historic Paramount Pictures lot in Los Angeles, featured in films such as Sunset Boulevard, if it succeeds in buying the studio’s parent company, according to people familiar with management’s thinking.

The consumer electronics giant already owns a large film and TV-production facility in nearby Culver City. Tokyo-based Sony is most interested in Paramount Global for its intellectual property, which includes movies like The Godfather and Top Gun: Maverick, said the people, who asked to not be identified because the discussions are private. It plans to keep Paramount Pictures as a label within Sony.

Sony is partnering with Apollo Global Management Inc. on a proposed $26 billion purchase of Paramount Global, which also owns networks like CBS, MTV and Nickelodeon. The two submitted a nonbinding letter of interest last week and are negotiating access to Paramount’s books for a closer examination before making a definitive offer.

The New York Times reported on Wednesday that Sony’s plans include selling Paramount’s TV stations and streaming service. Sony and Apollo declined to comment.

The pair are competing against a rival proposal from independent film and TV producer David Ellison. He’s offered to buy out the Redstone family, which owns a majority of Paramount’s voting stock, and merge his company, Skydance Media, into Paramount. A monthlong period of exclusive talks between Paramount board’s and Skydance expired last week.

Ellison and his partners, which include investor RedBird Capital Partners, are mulling what to do next, according to a person familiar with their thinking. Their last offer included a $3 billion investment in Paramount to fund a cash payout to shareholders and bolster the balance sheet. They could also just walk away.

Real estate investors have chased Hollywood studio space in recent years amid a boom in film and TV production. The market has cooled considerably, however, as entertainment giants reduce spending amid ongoing losses in their streaming TV businesses.

Read More: Blackstone, Apollo Bets on Hollywood Tested by Peak TV’s Fade

In 2021, Hackman Capital and Square Mile Capital Management acquired Kaufman Astoria Studios, the original New York home of Paramount Pictures, and the 55-acre CBS Studio Center in Los Angeles. The latter fetched $1.85 billion. At 65 acres, the Paramount space is bigger and also in a more central location.

Paramount Pictures is the only major film studio headquartered in the Hollywood neighborhood of Los Angeles. Having its lot turned into just another production space would be a “disaster” for the community, said Brian Curran, president of Hollywood Heritage, which operates a museum in the original building used by some of Paramount’s founders.

“There’s a number of good landlords in Hollywood, but when just a landlord takes over, the cultural artifacts go elsewhere,” Curran said in an interview. “It’s a real risk that we’d be taking, as someone who works in historic preservation, it would be an endangered monument.”

Locations like the Paramount lot, known for its ornate entry gates, don’t come on the market often. It’s now part of Hollywood lore that Paramount Pictures was performing so poorly in the 1960s that the company’s owner, Gulf+Western, almost sold the property to the cemetery behind the studio.

Tyler Cassity, whose family owns the Hollywood Forever cemetery, said he’s not interested in purchasing the studio lot but hopes it ends up in good hands. The cemetery and the studio sometimes share parking and organize mutual tours. Both the cemetery and the studio have embarked on expansion efforts.

“There’s a master plan waiting for somebody to invest,” Cassity said in an interview. “We don’t want them to go away.”

The lot holds sentimental value for Paramount Global Chair Shari Redstone, who in the past visited the studio with her now-deceased father Sumner. Paramount’s board didn’t engage with Apollo on an earlier $11 billion offer for Paramount’s film business alone, in part because Shari didn’t want the company broken up.

In the midst of negotiations to sell his family’s Fox entertainment assets to Walt Disney Co. several years ago, Lachlan Murdoch had a change of heart and asked to keep the historic lot. Disney now leases the space for TV production.