Hollywood Studio Developers Consider New Revenue Options

Los Angeles studio developers are pondering their next steps as more film productions move out of state and even the country.

Executives like East End Studios co-founder Jonathon Yormak spoke to the state of production spaces at Bisnow’s Los Angeles Studio Real Estate Conference last week, with some telling audience members they’re cautious but “hopeful” for a turnaround, L.A. Business First reported.

On one panel held at East End Studios’ Griffith Campus in Glendale, Yormak said high interest rates combined with film production fleeing L.A. has softened demand for studios in the region. That, he said, is making for a “pretty volatile environment.”

Film and TV production activity in Greater Los Angeles declined more than 22 percent in the first quarter, according to Business First. It was even worse for studio occupancy in the region in 2024 with a rate of 63 percent, down from 69 percent in 2023.

Yormak, however, believes a “personal commitment” by Californians to keep film work here will end up saving the day.

“Where we find ourselves today is hopefully coming out of a storm,” Yormak said. “I think the legislative changes in both New York and California are going to be good drivers for demand that didn’t exist before. We’re going to see new vitality.”

That sentiment was echoed by Jeremy Hariton, COO at The MBS Group, which operates studios including Radford Studio Center and Hackman Capital’s Television City. Hariton said many productions are “doing their best” to stay in the region despite trying economic circumstances.

“There’s an extreme desire for production to stay here at home,” Hariton said on the panel. “What we’re starting to see is similar to what we saw happen in New York, which is that when things in the state get passed, things change. I think you’ll see a lot of demand to come back here, where people in the industry are located.”

California’s Film & Television Tax Credit incentive program currently stands at $330 million per year. As productions look elsewhere for filming locations, Gov. Gavin Newsom is proposing to more than double the program’s funding to $750 million annually.

In the meantime, rather than build new studios, developers like East End are looking to adaptive reuse as a way of increasing studio space without new construction. Amazon, for example, turned buildings in downtown Culver City into its Culver Studios facility. East End’s forthcoming Mission Campus, set to open later this year in downtown L.A., is partially built at a former cold-storage facility.

— Chris Malone Méndez