Real estate professionals and analysts say owners of soundstages and other entertainment-related space will see a deluge of demand after the eventual resolution of a weekslong writers’ strike that has largely shut down production.
The anticipated extra need for this real estate — critical for making films and TV shows — resulted not only from the strike but from the number of shooting days dropping in the months before the walkout, they say.
The strike has economic ramifications beyond TV and show production, and it’s been curtailing demand for owners of related space. North America and the United Kingdom has roughly 23 million square feet of soundstage space, according to FilmLA, a not-for-profit firm based in Los Angeles that tracks this data.
The walkout that began May 2 pits the Writers Guild of America labor union against the more than 350 television and film producers represented by the Alliance of Motion Picture and Television Producers, with no timeline for when the job action could end. However, the entertainment industry will need to catch up after the strike, said John Raulet, vice president of Atlanta-based real estate broker Raulet Property Partners.
His firm finds movie and TV production space in Georgia, one of the largest states for soundstages with roughly 3 million square feet, according to FilmLA data.
Raulet said shows that normally would be filming now for the fall schedule aren’t in production, and shows that paused before the strike will need to resume.
“We’ll be very busy when a resolution to the strike is made,” Raulet said.
Demand for soundstages was falling before the strike in Los Angeles, which has the most square footage of soundstage space in the major markets in Canada, the United States and the United Kingdom tracked by FilmLA. Shoot days in the first quarter were down 24% year over year to 7,476, according to FilmLA.
The decrease in production was due to a variety of reasons, including entertainment firms finally catching up on pandemic-interrupted production, streamers cutting back on making programs as they waited for inflation to fall and interest rates to stop rising, and producers rushing to wrap up ahead of the anticipated strike, said Paul Audley, president of FilmLA.
Audley expects production after the strike will return to pre-pandemic levels, a positive for both the entertainment industry and the Los Angeles economy. He said that no developer has so far pulled out of work on the more than a dozen speculative soundstage projects that are proposed around Los Angeles.
When it comes to demand for production space after the strike, “it’ll be a boomerang effect,” Audley said.
Soundstage space and studio owners, though, have been feeling the pain as production has slowed in the U.S. and Canada leading up to and including the strike.
Executives at Los Angeles-based Hudson Pacific Properties, a major office and soundstage space owner, said this month that the strike had already been affecting the company’s operating results. The company’s share price fell roughly 17% over the past five trading days.
The strike has virtually ended sales and leasing of studio real estate in greater Vancouver, one of North America’s largest film and TV production hubs, said Josh Gaze, a Colliers broker who markets studios and other industrial properties.
Studio real estate deals started to ebb last year in Vancouver and other parts of British Columbia as streamers pulled back on film and TV production in the slowing economy.
Gaze said added need for space in that region hasn’t “surfaced for quite some time, and it’s certainly attributable to the writers strike, as well as the slowdown in streaming and the broader economy. Studios are sitting empty now.”
Hollywood studios spent a record $4.8 billion across greater Vancouver in 2021 as the industry rebounded after the prior year’s pandemic shutdown, according to the Vancouver Economic Commission website.
British Columbia’s tax incentives designed to lure film producers in recent years have attracted production of major TV shows including “Riverdale,” “Supernatural,” “The Flash” and “The Night Agent.”