Is it the end of Hollywood’s love affair with, well, Hollywood?
Selling pricey Los Angeles real estate may be a lucrative option for old-line film studios trying to cut costs. Their streaming competitors, meanwhile, have chosen to lease space as they beef up their original content.
Many of them have sprawling properties worth millions of dollars stretching up to a billion, according to tech news website the Information. Companies could move out of expensive areas or rent production facilities, saving money, the Information reported.
In September, The Real Deal learned that CBS Corporation had been in talks to sell Television City, a massive complex in Los Angeles. The property sits on 25 acres and has 1 million square feet of studio and office space and eight stages.
In a third-quarter earnings call in November, CBS chairman and chief executive Les Moonves said the company was “in the very preliminary stages. We have received an offer from one of the people in the neighborhood, and so we hired somebody to explore the possibility. It’s — as I said, it’s very expensive real estate. It may be money that could be used better elsewhere, but it’s at the very preliminary stages.”
CBS acquired the lot from the A.F. Gilmore Company for $1.2 million in 1949. The campus was then built in 1952.
The 20th Century Fox compound in Century City is valued at $1.5 billion. The Murdoch family kept the lot after Disney acquired Fox’s assets for a reported $52.4 billion in December.
Paramount Pictures has 56 acres in Hollywood. Sony Pictures has a 45-acre complex in Culver City. Both properties could be worth as much as $1 billion, according to the Information.
Meanwhile, competitors Netflix and Amazon are leasing property. Netflix leases a property in Hollywood and e-commerce giant Amazon leases space in Culver City.
Other studios such as Universal are based outside of West Los Angeles, in cheaper markets.[The Information] — Hannah Madans