We have seen a flurry of investment, particularly from private equity firms, in soundstage revamps and even new developments over recent years. Brandon Blake, resident entertainment attorney at Blake & Wang P.A, unpacks more about the phenomenon as the Television Center in Hollywood gets a redevelopment.
Hollywood Stage Space Boom
Despite the wider global economic climate, stage space is the new bet for the entertainment industry, it would appear. Just this week we have seen BARDAS Investment Group and Bain Capital Real Estate announce a $600M revamp to the former Television Center (6311 Romaine St). The new facility will be a 620,000-square-foot facility with four stages. It will reopen as the Echelon Television Center, and work will begin in 2024. It will reopen as the Echelon Television Center, and work will begin in 2024.
This will add on to the redeveloped Sears close by, a $450M dollar project from the same investment partnership that will have four additional soundstages of 19,000 square feet. This redevelopment is set to start in 2023. It’s also the first wholly new soundstage project in Hollywood in over a decade.
Historically, the site served as Technicolor’s HQ, and once the studio lot for Metro Pictures.
The Wider Production Space Picture
From this project inside Hollywood itself to soundstages and other production facilities being built as far afield as Toronto, there’s a lot of development and redevelopment happening. Partly this is driven by the increased production demands brought about by the rise of streaming services needing constant content churn. While it’s always good to see underutilized spaces redesigned to modern standards, this also suggests a wider imbalance in supply vs demand regarding soundstages globally. It is extra intriguing that we’re seeing so many private equity firms moving into the space.
The Old Blackhall Studios in Atlanta, due to reopen at double the size as Shadowbox Studios, partly due to investment from Silver Lake. A new production facility in LA will be funded by Blackstone and Hudson Pacific Properties. Hackman Capital, admittedly already one of the largest owners of production space among independent bodies, has expanded their portfolio with 19 new studio facilities in the last 8 years. They have over 90 stages currently under construction. We are seeing similar booms in Europe and the UK, too.
Property investment companies are naturally always interested in expanding into growing markets. And as mentioned, the broadening of streaming and higher overall production rates to feed the now 24/7 entertainment cycle, as well as the truncating of theatrical windows, has created an ideal environment for soundstage investment. There’s one other factor- longer leases. More stages are being leased for length periods, instead of the few months, they once were. Some streamers are even making multi-year deals.
Overall, it’s a good time to be in this environment, and many investors are even seeing it as recession-proof. Of course, there’s a healthy equilibrium to reach, and we are hoping not to see a glut of properties come online just to stand empty. But for now, this space is looking interesting indeed.
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