Take two: Vacant offices find new purpose in TV, film

Backlot’s headquarters at 57th and Madison doesn’t feel like a prime Midtown office. 

The former Revlon building at 625 Madison Avenue is dimly lit with low ceilings, and Backlot’s space there feels more like a 1980s call center than a modern office. It’s almost uncomfortably wide. 

It’s the type of space no one in New York seems to want these days. But it was the perfect place for Darren Goldberg to launch his business. 

Goldberg’s Backlot converts empty, vanilla offices like his own into Hollywood production sets. 

In early 2020 he persuaded SL Green, which was in a messy ground lease dispute with Ben Ashkenazy, to turn 625 Madison into an entertainment hub. Backlot brought nine production offices into the building and brought in shows like HBO’s “The Flight Attendant.”

From there, Backlot became real estate’s go-to conduit for film, television and commercial shoots. In New York City, the firm works with more than 50 major landlords, including not only SL Green but Hines and CIM Group. It has more than 24 million square feet of rentable space, with production credits ranging from “Billions” to “The Marvelous Mrs. Maisel.”  

Landlords see Backlot as an opportunity to pull in extra revenue in a struggling market where office leasing remains slow and occupancy hovers just around 50 percent, according to Kastle Systems, which tracks keycard swipes. 

This slowdown has led office owners to consider alternatives like converting space into housing or adding pickleball courts. But those options involve major costs, so some landlords are tuning into film and television as a short-term strategy.

The money from production shoots is not going to pay a building’s mortgage. But landlords today will take anything they can get. 

Behind the scenes

When Goldberg first reached out to office owners, his business was a hard pitch. Real estate firms wanted long-term leases with steady income from corporate tenants. 

“SL Green, like many other landlords, was not interested in short-term opportunities,” Goldberg said. “It’s just not their business model.” 

“It was a pain in the ass,” he added. 

There are cameras, heavy equipment and sometimes as many as 150 people running around on a set. Shoots also require multiple rounds of approvals with lawyers to get started. It was just not worth the owner’s time.   

So Backlot set out to streamline the process. 

“They might not know that hidden within One Vanderbilt there’s an underground sushi restaurant or a hidden wine room.”
Darren Goldberg, Backlot

The firm handles all the logistics with the property manager. It worked with over 500 buildings to create a catalog of sites ranging from parking lots to luxury residential buildings. Goldberg said Backlot’s location scouts specialize in finding spots that are still unknown to directors. 

“They might not know that hidden within One Vanderbilt there’s an underground sushi restaurant or a hidden wine room,” he said.

Backlot claims it has generated about $15 million in fees for its landlord clients. SL Green’s Steven Durels said Backlot brought in between $2 million to $3 million annually in additional income for his firm.

For SL Green, which has more than 33 million square feet of office space, that’s barely a footnote in its ledger. 

But landlords say the marketing exposure is a key asset. After all, how do you convince anyone that one shiny glass edifice is better than another? Tell them a “Spider-Man” movie or “Succession” filmed there.

“There is a certain sex appeal to say there is a blockbuster film filmed here,” Durels said.

“We have a developer saying, hey, I am building a new building and we want a Marvel movie,” Goldberg said. “Or, I got a high-end office space. Can you get me “Billions” in there?”

The struggle is real

A large chunk of New York’s office stock is in trouble. 

Despite projections of a mass return to the office coming out of the pandemic, people still want to work from home. Few companies are looking to lease more space, and even fewer are looking to do so in Class B or Class C buildings.

The fix is unclear. Some are attempting to convert their buildings to residential. A 15-story Union Bank Tower in Portland, Oregon, is being marketed for sale as a data center conversion. 

And not only are conversions costly, but finding financing can be a challenge. So is persuading lingering office tenants to leave — even if the rest of the building is empty.

Backlot’s model is different. It does not require tenants to sign leases. It uses licenses instead, and landlords can continue to market their office space for lease. Most of the productions last from days to a few months. Anything beyond that is a tough sell to landlords and leasing brokers.

“If a show wants [a space] for eight months, that’s when the leasing guys who are after the long-term deal get a little itchy, because they don’t want to miss out on that long-term deal,” Goldberg said. 

Backlot also benefits from New York’s push to become a film and television production hub.

This year, New York Gov. Kathy Hochul increased the annual film tax credit to $700 million from $420 million. Studio space is booming across the outer boroughs. In Queens, Wildflower Studios is building a 775,000-square-foot, $600 million production studio in Astoria.  In Brooklyn, Steiner Studios is planning a 525,000-square-foot TV and film studio in Sunset Park.

Landlords are looking at other short-term options to bring in extra revenue. Hines’ Doug Goldhill said that in addition to Backlot, his firm’s buildings are hosting rooftop gatherings, board meetings and events for New York Fashion Week.

These alternative sources can bring in money, but it still won’t make up for companies ditching entire leases or employees working from home. 

“We are not a solution like turning your building into residential. We are not there,” Goldberg said. “We are a great partner, a great addition and a great new revenue source.”

So even though Backlot’s business model is not a panacea for the market’s ills, office beggars can’t be choosers.