Film and television production has been reborn in Los Angeles in recent years, thanks to the growth of streaming services like Netflix Inc. and Hulu as well as tax incentives.
In L.A., that renaissance is a boon for the handful of local property owners with deep portfolios of soundstage and studio buildings. Brentwood-based Hudson
Pacific Properties Inc. is one of the biggest owners of studio space in the region. It owns Hollywood’s famed Sunset Gower Studios as well as the nearby Sunset Bronson and Sunset Las Palmas properties. The three studios contain a combined 37 soundstages and 1.2 million square feet of facilities on 41 acres.
Bill Humphrey, senior vice president for Sunset Studios at Hudson Pacific, said the company’s studios are close to 100% occupied.
“The demand for spaces has significantly outpaced the stages,” Humphrey said. “Companies are looking to lock down as many studios as they can to have that means of production.”
Across greater Los Angeles, film stages are 95% occupied, up from 70% a decade prior, according to the nonprofit regional film office, Film LA Inc. “It’s a great time to be a soundstage owner,” said Paul Audley, Film LA’s president.
A consolidated business
While major studios like Paramount Pictures Corp., Warner Bros. Entertainment Inc. and Walt Disney Co. house some soundstages on their lots, most of the studio space in the L.A. region is owned by a small number of companies, brokers said.
Besides Hudson Pacific, Occidental Entertainment Group Holdings Inc., Hackman Capital Partners, Quixote Studios and Bristol Group Inc. hold significant assets for film and television production in Los Angeles.
For many property companies, it doesn’t make financial sense to own production facilities, said CBRE Group Inc. Executive Vice President Craig Peters.
“Most of the investors love to see buildings that have long-term leases with a stable income stream,” Peters said. But for film and television production, leases often don’t go longer than a year — since that’s the longest it would take to shoot a movie or a season of a TV series.
That business model can be lucrative — it just takes more work. “It’s much more operating a business than just a passive real estate investment,” Peters said.
Occidental Entertainment Group owns and leases dozens of soundstages as well as filmmaking equipment around the county. Chief Executive Craig Darian said the rise of streaming services has been good for business. He said Occidental’s stages have been 100% occupied.
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