Hollywood Strike Is Over but Studio-Space Developers Face New Dilemmas

livemint.com:

Real-estate developers that have bet billions of dollars on the streaming boom cheered when striking Hollywood actors reached a tentative agreement last week with major studios and streamers. But that relief over a union deal might prove short-lived. The streaming industry that emerges from the labor battles of 2023 will be different in ways that will likely reduce demand for space by the television and film industry.

Blackstone, Hudson Pacific Properties, Bain Capital Real Estate and other property owners have invested billions of dollars to acquire or build production space and cash in on the booming demand for streaming services. These firms will be glad to see their properties bustling again. Studios and soundstages have been mostly quiet since May.

Some of the properties were insulated by long-term leases that required studios to pay rent regardless of use. But overall, the actors’ standoff—and before that, the writers’ strike—resulted in losses for developers that added millions of square feet of production space in recent years targeting demand from fast-growing streaming services such as Netflix, Amazon Prime, Max and Apple TV+. Hudson Pacific Properties, the Los Angeles-based real-estate investment trust, reported earlier this month that its soundstages and production services alone have lost about $100 million from the strikes.

In June, Electric Owl Studios opened a facility in Atlanta with six stages, 50,000 square feet of office space and over 100,000 square feet for storing wardrobes, building sets, catering and other support functions. Only one tenant has done any shooting there so far: “Lego Masters," a Fox competition show. “We were all refreshing our browsers every five seconds for the past six months,"