Lights! Cameras! Investments!
A joint venture formed by King Street Capital Management LP in partnership with Alberta Investment Management Corp. on behalf of its clients and a sovereign wealth fund will work with East End Studios to acquire and develop Class A production studios to meet the exploding demand for content creation in U.S. and international film hubs.
The joint venture’s first projects will total more than $500 million in capitalization and add about 750,000 square feet of stage and related ancillary space at three locations in the Los Angeles area—two in Glendale, Calif., and a third in downtown Los Angeles—over the next few years. The partnership will target existing facilities along with redevelopment and development opportunities in an effort to consolidate a world-class portfolio of production stages. Beyond Los Angeles, King Street said it is targeting future opportunities in cities like New York, where there are natural built-in advantages such as strong talent pools and production crews.
The Hollywood Reporter recently reported developers and investors are increasingly targeting deals in top studio markets like Los Angeles, New York City, Toronto, Vancouver and Atlanta to meet the growing demand for streaming film and television content.
In July, Hudson Pacific Properties Inc. and Blackstone said they were pursuing opportunities in Greater Los Angeles as well as in New York City, London and Vancouver. That joint venture teamed up to develop Sunset Glenoaks, the first large-scale, purpose-built studio in the Los Angeles area in more than 20 years. The studio will cost between $170 million and $190 million and feature more than 240,000 square feet in Sun Valley, Calif. Once Sunset Glenoaks is completed, that joint venture will own and operate 42 stages, or 3.5 million square feet, in the Los Angeles area.
New joint venture
David Walch, partner at King Street, a global alternatives investment firm that manages approximately $20 billion in assets, said in a prepared statement they are drawn to the supply-demand imbalance in the studio sector. Walch said King Street with its joint venture partners looks forward to leveraging their extensive experience to successfully reposition real estate assets in the studio sector and work alongside East End Studios to create best-in-class space for the entertainment industry.
East End Studios is a private equity-backed growth platform with teams dedicated to real estate acquisitions, financing and development, as well as studio management and leasing. The partners at East End Studios have more than 20 years of film and TV production and studio management experience. They have executed more than $20 billion in real estate transactions. Shep Wainwright and Craig Chapman, partners at East End Studios, said they plan to draw on the teams’ years of experience to ensure that the facilities meet future needs as the industry evolves.
Ian Woychuk, director of real estate at AIMCo, which has more than $150 billion in assets under management, said in prepared remarks that streaming services continue to grow rapidly as new players enter the market, a trend accelerated by the pandemic. He noted technology now plays a greater role enabling more production to occur on sound stages and driving an enormous demand for modern studios globally.