Real Estate Investors Are Hungry for Movie Studios

CBS Studio Sells for Over $1.8 Billion

CBS Studio Center in Los Angeles is being sold for over $1.8 billion to Hackman Capital Partners and Square Mile Capital Management. The studio complex has 210,000 square feet of office space and 18 sound stages. The final sale is happening after an intense bidding war.

Just three months ago when CBS Studio Center was put up for sale, it was worth between $1.2 and $1.3 billion, which is about $500 million less than what it fetched yesterday. Studio space is currently in high demand and real estate investors are eager to buy any studio space they can find.

Demand for Studios Soars

CBS Studio Center’s more than $1.8 billion price tag shows just how strong demand is for space. This is because streaming services are churning out content and need space to film it. As competition in the streaming industry heats up, Netflix (NFLX), Amazon (AMZN), Apple (APPL), Disney+ (DIS), and others are clamoring for studio space.

Production companies are noticing this trend and are selling their complexes and leasing space. This has been happening for several years. In 2019, CBS sold its Los Angeles-based Television City studio complex to Hackman Capital for $750 million.

Real Estate Investors Go to Hollywood

Real estate investors want a piece of the action. They are snapping up any real estate associated with the film industry whether that means studios or office buildings. Private equity firm TPG purchased Cinespace Studios last week for $1.1 billion, getting access to 56 sound stages in Chicago and Toronto. Earlier this year Hackman and Square Mile bought Kaufman Astoria Studios and Sony Pictures Animation. Meanwhile in 2020, Blackstone (BX) acquired a 49% stake in a venture that controls Hollywood studios and commercial properties.

Content providers are competing for viewers by developing new shows, movies, and games. That requires studio space, which is limited. Real estate investors are on the edge of their seats to get involved in the content boom.

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