The public’s growing appetite for streaming video content – accelerated of late by COVID-19 restrictions on social gathering – has ignited demand for sound-stage real estate in several North American markets, according to a new report from CBRE. At 1.5 million sq. ft., New York City is the third-largest film market in North America and the oldest in the nation, established in 1896. According to the CBRE report, New York’s entertainment sector employment grew by 49,000 jobs from 2010 to 2018—an increase of 16%. New York ranks second to California in total entertainment employment in the U.S.
Sound stages, often called production space, still are a niche sector, totaling roughly 11 million sq. ft. across six leading entertainment-production markets: Los Angeles, Atlanta, New York City, British Columbia (primarily Vancouver), Ontario (primarily Toronto) and Louisiana (primarily New Orleans). Occupancy rates in major markets hover above 90 percent, and an influx of institutional capital into the sector has encouraged standardization of formats and operations.
“New York City is ideal for small to mid-sized production studios due to the density of the market,” said Nicole LaRusso, Director of Research & Analysis, CBRE Tri-State. “New York’s film tax incentive program currently maxes out at $420 million compared with California’s $330 million. As a result, New York City is one of the most sought-after markets for television production companies.”
The CBRE report spotlights New York City’s Broadway Stages, which started as a single sound stage converted from an old movie theater in Astoria, Queens in 1983. Since then, Broadway Stages has become the largest film studio in New York City, with locations spread across Queens, Staten Island and Brooklyn. The studio operates nearly 40 stages totaling more than 400,000 sq. ft. of indoor sound stage space. Recent notable productions include television’s “Saturday Night Live,” “Marvel’s Daredevil,” “Mr. Robot” and “The Marvelous Mrs. Maisel.”
North American Production Space By Market
| Market | Total Production Space* | Market | Total Production Space* |
| Los Angeles | 5.5 million | British Columbia, Canada | 1.2 million |
| Atlanta | 1.8 million | Ontario, Canada | 800,000 |
| New York City | 1.5 million | Louisiana | 700,000 |
- In square feet
CBRE reports that capitalization rates for sound stages are edging closer to those of other, more liquid asset classes. Among the institutional investors long active in production space are Hudson Pacific Properties and Hackman Capital.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
