Entertainment Industry REITS: Where Hollywood And Main Street Meet
What’s interesting about real estate investment trusts (REITs) is they provide a way to invest in a sector through a portfolio of commercial properties doing business in that sector. Publicly traded REITs number about 200 and touch on many vital commercial RE sectors from self-storage to multifamily to office and every other CRE specialty.
So when Hollywood’s Variety writes about REITs, it’s a bit of a surprise at first. At least it’s a surprise until you remember that the movie business consumes a lot of commercial property in the form of the production studio. They don’t call it a “backlot” for nothing.
Joseph Lisanti’s piece on entertainment industry REITs spells out that the intersection of showbiz and square footage forms a small number of investment opportunities – he identified two although there are more – that match properties with investment capital.
Hudson Pacific Properties owns office buildings in Northern and Southern California as well as the Sunset Bronson Studios (the original Warner Bros. Studios) and Sunset Gower Studios (Columbia Pictures’ headquarters through 1972). The studios represent about 20% of HPP’s revenues, but some of its office properties, including the Technicolor Building in Hollywood, also have a biz connection.
Taking a different tack is Entertainment Properties Trust (ticker symbol EPR), which owns 112 multiplex venues and close to 2,000 screens. The company also owns metropolitan ski parks and properties used for public charter schools, but 77% of its revenue comes from theater properties and associated retail operations.
We’d blogged about Entertainment Properties Trust before – a CNBC clip featuring EPT’s CEO David Brain talks about the formation of portfolios, which should be of interest to any broker. Theater as economic driver and keystone for nearby commercial property value is a common story in primary, secondary and tertiary markets alike.
- 10 Stocks That Show the Real Estate Boom Has Arrived (Update2) (thestreet.com)
- Spotlight on REITs: Banyan Strategic Realty Trust (moneymanager.com)
- Real Estate Investment Trusts (REITs) and Commercial Real Estate: The Daunting Gap (confoundedinterest.wordpress.com)