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The next stage of the streaming wars is being filmed live in front of a live studio audience.
CBS Studio Center, the Los Angeles complex where Seinfeld, The Mary Tyler Moore Show, and other classic sitcoms were taped, is expected to sell for $1.8 billion in a near-finalized sale to Hackman Capital Partners and Square Mile Capital Management LLC, The Wall Street Journal reported Tuesday. That's $500 million over the figure expected when it hit the surging soundstage market last summer.
No Real Estate Business Like Show Business Real Estate Business
Moviemakers including Disney and Warner Bros. used to own their stages. But today, real estate investors are buying up studios, offices, and other film and TV production facilities in hopes of capitalizing on the streaming wars, as Apple TV+, AmazonPrime, Netflix, Hulu, Disney+, Paramount+, and Peacock need to rent out space to churn out an endless supply of content for viewers to binge on.
With soundstages in such high demand, real estate investors are plunking down billions for some big-ticket properties:
- Despite a pandemic drop-off in 2020, the number of scripted television shows premiering annually has been rising for the past decade, hitting 532 in 2019, up 7% from 495 in 2018.
- Other blockbuster sales include the planned $1.1 billion purchase of Cinespace Studios in Chicago and Toronto by private equity firm TPG, which is also spending $74 million for Studio Babelsberg in Germany; and Blackstone is laying out $1.65 billion for 49% of a Hudson Pacific Properties' venture that includes three studio lots and five buildings in Hollywood.
"We're seeing the whole sector becoming more institutionalized," Stephen Somer, managing director at Eastdil Secured LLC, told The Journal.
All The World's Stages: Keep an eye on the international studio market as streaming services expand overseas. Netflix already leases studios in Mexico, the UK, and Spain, and is doubling down on spending on original content in Asia. In February, it announced a $500 million push in South Korea, home to Squid Game. In March, it leased new studios in Japan, which will overtake Australia as the company's biggest Asia-Pacific market by the end of the year.