Silicon Valley investor goes Hollywood with $500M for soundstages

Silver Lake’s backing to help Shadowbox Studios expand TV and film production

Silver Lake co-ceo's Greg Mondre and Egon Durban (Silver Lake, Wikipedia)
Silver Lake co-ceo’s Greg Mondre and Egon Durban (Silver Lake, Wikipedia)

A Silicon Valley private equity firm is investing $500 million to build soundstages for TV and film production in Los Angeles, Atlanta and London.

Silver Lake, based in Menlo Park, is investing in the expansion of Shadowbox Studios, a production-facility company once known as Blackhall Studios, with more than $1.5 billion in expected development, the Wall Street Journal reported.

Shadowbox Studios aims to grow its portfolio to meet the high demand for soundstages around the globe.

The companies said the $500 million investment is helping Shadowbox expand to dozens of soundstages across more than 4 million square feet of leasable space in Los Angeles, Atlanta and London, which have become production hubs thanks to tax-credit programs that subsidize film and TV work.

Silver Lake’s investment in production facilities speaks to a continued shortage of available real estate for film and TV producers.

Hollywood producers say the need for physical space has emerged as one of the key challenges in competing against rivals. As entertainment companies struggle to attract and retain subscribers for their streaming services, they are making a flood of movies and TV shows to keep viewers hooked.

But as the number of movies and TV shows skyrockets, the supply of soundstages has “simply not kept pace with the demand,” said Shadowbox director Peter Rumbold.
L.A.-based Commonwealth Asset Management is the majority stakeholder after acquiring Shadowbox last year for $120 million, according to the Commercial Observer.

Shadowbox is now building a 1.3 million-square-foot studio campus with 19 soundstages in Santa Clarita in northern Los Angeles County. It also operates a 850,000-square-foot studio facility with nine soundstages in Atlanta, which was home to recent films like “Jumanji: The Next Level” and “Godzilla: King of the Monsters.”

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The firm is developing another 1.2 million square feet with 22 soundstages in Atlanta. And, in London, Shadowbox recently completed the first 150,000-square-foot phase of its nearly 1 million-square-foot Shinfield Studios project, which is fully leased.

Once its current pipeline is empty, Shadowbox will own and operate a portfolio of 68 soundstages – half of them in Atlanta – and more than 4.2 million square feet of leasable area. The firm’s subsidiary, Lamp Dock, provides lighting and grip rentals, according to the Observer.

Over the past several years, investors including Blackstone Group Inc. and Bain Capital Real Estate have also poured billions of dollars into the sector.
For Silver Lake, moving into production real estate follows its investment strategy targeting production spending across Hollywood.

The firm already has stakes in Endeavor Group Holdings, the entertainment company encompassing the Ultimate Fighting Championship and Hollywood representation business, and Cast & Crew, a payroll company specializing in entertainment productions.

Shadowbox, based in Atlanta, launched with its facility in Atlanta in 2017 before expanding to the U.K.

Silver Lake has more than $88 billion in combined assets under management and committed capital, while Commonwealth manages approximately $1.7 billion in assets.

[Wall Street Journal, Commercial Observer] – Dana Bartholomew

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