UPDATED, June, 21, 2023, 11:19 a.m.: Even with thousands of Hollywood writers on strike, Hudson Pacific Properties is forging ahead with plans to add on to its studio development in Hollywood.
The Los Angeles-based REIT has filed plans with the city of Los Angeles to build a 134,000-square-foot movie studio at 6650 West Romaine Street — located directly across the road from its Sunset Las Palmas studio complex, according to filings with the city’s planning department.
In 2017, Hudson Pacific bought the 13-soundstage, 369,000-square-foot complex Sunset Las Palmas for $200 million. Four years later, the firm sold off a 49 percent stake in the development and two other L.A. studio complexes to Blackstone in a deal valued at around $800 million.
The new plans are part of the companies’ “long-term strategy to expand and enhance” its Sunset Studio developments across L.A., a spokesperson for Hudson Pacific said in a statement. The firms have disclosed they plan to add about 618,000 square feet to Sunset Las Palmas, according to filings with the U.S. Securities and Exchange Commission.
In 2021, Hudson Pacific completed a new 130,000-square-foot office complex at the development, which is currently leased to post-production firm Company 3.
The three-acre site on Romaine Street currently serves as a parking lot for the studio, which will house four soundstages and offices to support production.
Hudson Pacific’s existing studios have been affected by the Writers Guild of America strike, which began in early May.
“Whether brief or protracted, the strike will impact the entire studio business,” CEO Victor Coleman said on an earnings call last month, adding Hudson Pacific will feel less of the pain, given 70 percent of its studio square footage is subject to multi-year leases with minimum revenue guarantees.
And it’s still betting on the sector in the long term.
“Even if spend on high-quality original content moderates in the coming years in pursuit of profitability, current estimates indicate it will be at least on par with last year’s following a period of ramp-up post-strike,” Coleman said on the earnings call.
Hudson Pacific reported a $20.4 million net loss in the first quarter, up 3 percent from the same period last year. The firm acknowledged that higher interest expenses and a dip in office occupancy have impacted its performance.
To help boost its financials, Hudson Pacific is looking to sell six properties and has cut its dividend.