Studio boom in Hollywood – a $450 Million complex is under development
New demand for big entertainment-related spaces comes not just from old-line entertainment companies and newcomer streaming services such as Netflix, Apple TV+ and HBO.
Soundstages “have been in short supply for a long time,” real estate developer David Simon said to LA Times. “Occupancy has been at 95%-plus for the last five or six years, and looking forward we don’t see a letup in demand.”
GREATER LOS ANGELES SOUND STAGE INFRASTRUCTURE
54 – Studio Production Facilities
394 – Certified Sound Stages
5300000 – Square Feet of Certified Production Space
Simon wants to build a multi-million dollar studio complex on the site of a long-closed Sears store and parking lot built in 1951 on Santa Monica Boulevard, west of the 101 Freeway. Plans call for a studio with five soundstages and support facilities including offices and space for production base camps where trucks, equipment and actors’ trailers are placed.
The complex, called Echelon Studios would feature four 19,000 square foot sound stages, a 15,000 square foot “flex stage” and a 90,000 square foot “creative village” including multiple bungalows. The site would occupy what used to be a Sears store and parking lot, which closed in 2008.
“We believe the intense growth from the digitalization of content presents a compelling opportunity to create a uniquely integrated platform that partners with tenants to develop an unmatched experience,” said Joe Marconi, a managing director at Bain Capital Real Estate.
“The increase in demand for new content and limited existing studio and production space is generating competition in the market,” said David Simon, Bardas founder and managing principal.
Developers and larger media networks are responding by creating new facilities – all over the world
Adapting to changes in consumer behavior is more important than ever, the film industry has to consider. More consumers are cutting the cord and going OTT. When the market reaches the figures of social media giants like Facebook (e.g. 2 Billion+ users), it becomes even more lucrative to stream content because of the market size. Ticket sales show the film industry has been down in the last year.
Whether it is due to audience fatigue or just horrible movies, if this trend continues then OTT will be viable for some studios. It can also further bolster changes in the way the film industry produces and distributes content, where the box office will represent a smaller share while the larger part of the business goes streaming.
In September 2019 Disney took a long-term lease on stages and production accommodation at Pinewood Studios in Buckinghamshire. A few months earlier Netflix entered a long-term deal with Shepperton Studios in Surrey to create a dedicated production hub there. Such long‑term leases, while great for the UK TV and film industry, have led to a shortage of studio space.
The high demand helped European studio complexes to win small battles, just remember “The Witcher”, “Shadow and Bone”, the last few hits on Netflix or the upcoming “Dune” by Dennis Villeneuve, which were produced in Hungary – which became a regional filming hub in the recent decade.
Disney/Marvel is filming its “Moon Knight” series in Budapest and Lionsgate just started shooting “Borderlands” with an ensemble of A list stars also at ORIGO Studios – a Hollywood standard film complex in Budapest, which is almost the same in size compared to the now planned new Echelon Studios.
If the number of studio complexes increase rapidly, the occupancy ratio will start its journey down – which leads to a lower rental rate industry-wide. Is that maybe a plan to get the ball back from European studios?