Soundstages from film and television are Red Hot Real Estate’s Wall Street performance – The Hollywood Reporter



Not so long ago, before the pandemic, some real estate investors may have shunned studio sites out of concern that they would have unoccupied or underutilized scenes for filming. With Wall Street cooling off in office towers, hotels and malls amid telecommuting, online shopping and COVID-19, large private equity funds are flowing to studio site operators in North American cities. “We’re a new asset class for large financial institutions,” says Chris Cooney, CEO of EUE / Screen Gems Studios, which operates the 11-story Atlanta complex where Netflix Very strange things The fourth season was filmed in 2020.

In the leading studio markets of Los Angeles, Toronto, Vancouver, Atlanta and New York, developers are investing in their own campus-sized premises to meet the growing demand for movie and TV streaming from subscribers. Longtime owners are cashing in: On August 23, ViacomCBS put up its Los Angeles-based CBS Studio Center property for sale as it plans to fund its streaming projects. And customers “do not want warehouses for different products,” says Paul Bronfman, CEO of Comweb Corp. and Chairman of Pinewood Toronto Studios.

For sound stage operators, whose property values ​​rise and fall based on demand, the knowledge that they can provide long-term leases and anchor tenants makes them attractive to financiers. With the studio booming in content production, “the studio is very busy and it’s almost a guarantee that the building will be full,” says Alex Godfrey, vice president of William F. White International’s Canadian studio in Vancouver.

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Sunset Bronson Studios houses Netflix’s Los Angeles corporate offices.
AaronP / Bauer-Griffin / GC images

“Over the past few years, we’ve seen accelerated growth in demand, lengthening leases and strong lending support,” says Nadim Megji, head of American real estate at Blackstone, who led the investment group’s 2020 acquisition of 49%. share in three Hudson Pacific studios in Los Angeles with 35 soundstages at hotels such as Sunset Bronson, Sunset Gower and Sunset Las Palmas.

Netflix opened its Los Angeles headquarters at Sunset Bronson Studios in 2017 and signed new leases for production centers in Toronto in 2019 and Vancouver a year later. Meanwhile, in 2019, Lionsgate partnered with investment fund Great Point Capital Management and real estate firm National Resources to become a minority investor and anchor tenant in a $ 100 million studio complex under construction in Yonkers, 20 minutes from Manhattan. … “We have complete flexibility. We are large tenants as well as investors, so we can plan ahead, ”says Kevin Beggs, chairman of the Lionsgate TV Group, about using Yonkers scenes to film his own show or subletting a full-time space.

Hudson Pacific Properties and Blackstone are building Sunset Glenoaks Studios as a media campus in Sun Valley, California, with seven soundstages on 10 acres that integrate office and studio space (anchor tenant not yet named). “All in one. With an entire campus, you can have your visual effects department, your preparation and post-production, your writing room, the actors and talent on site, ”says Victor Coleman, CEO of Hudson Pacific Properties.

Coleman adds that real estate investors like Blackstone are now turning to showbiz because media giants like Netflix, ViacomCBS, and Walt Disney are leveraging steady streaming subscription revenues to produce much-needed content, making studios in high demand … “[The investors] I love credit. They love the opportunity to develop a platform that includes real estate and amenities, and, yes, they really love the opportunity to lead this sector, ”says Coleman.

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Sony Pictures Animation Campus in Culver City.
Courtesy of Hackman Capital Partners

In January, investment firms Hackman Capital Partners and Square Mile Capital Management acquired Sony Pictures’ animation property in Culver City, across the street from their other campus, Culver Studios, where Amazon Studios is located. Jason Hariton, director of real estate for MBS Group, a division of Hackman Capital, says mainstream studio operators are increasingly looking to be a department store as projects are filmed both domestically and internationally. “Amazon has headquarters with Hackman Capital in Culver City, but then they shoot in locations with partners around the world,” notes Khariton.

And just as Amazon wants to dominate the online trading market, Hackman Capital aims to dominate the global studio, equipment rental and ancillary services business around the world. “We’re not trying to mine gold,” says Michael Hackman, CEO of Hackman Capital. “We sell pots, pans and jeans, we make sure the people who create the content have the best facilities, equipment and services, and in terms of production logistics around the world, we ensure the safety of the places and crews they need. … “

Trilith Studios, headquartered in Georgia, has taken the blended concept of studio towns one step further. He built a 235-acre city with his own homes, restaurants, and schools to bring creative people to his 24 soundstages that have been home to films at Marvel’s. Avengers franchise. “There are a lot of studios in the Atlanta market and a lot of people who can build a stage,” says Craig Hale, chief operating officer of Trilith. “We’re not just building big empty spaces. We’re trying to create targeted spaces that inspire creativity with bars, restaurants and sports facilities in the neighborhood. ”

The winners of the new film studio construction boom are expected to be big players with established relationships and monster studios in Hollywood or other North American locations where talent and tax breaks are already available. New York and Los Angeles are not going anywhere because they are home to top talent, says Tim Bell, director of Relativity Architects, which has plans to build six campus-sized studios in Los Angeles alone. In other cases, bottom line continues to influence decisions about where to film Hollywood movies and TV shows. Bell adds: “Having a scene like this doesn’t make people want to shoot in Vancouver, unlike the tax credit.”

A version of this story first appeared on the August 25th issue of The Hollywood Reporter magazine. Click here to subscribe.


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