“In Each Market The place We Open, Demand Has Exceeded Provide”

Name it leisure’s new House Odyssey. An explosion of streaming platforms, a surge in content material and a scarcity of house to provide all of it has ushered in a frenetic period of constructing, shopping for and increasing soundstages. It’s a aggressive market, one led by Michael Hackman, founder and CEO of Hackman Capital Companions, credited with turning world studio actual property right into a thriving new asset class.

Kaufman Astoria Studios in Queens - Credit: Anthony Behar/Sipa via AP Images

Kaufman Astoria Studios in Queens – Credit score: Anthony Behar/Sipa by way of AP Photos

Anthony Behar/Sipa by way of AP Photos

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Over the previous 5 months alone, Hackman Capital Companions has struck offers to accumulate the historic CBS Radford lot in Studio Metropolis; Wardpark Movie and Tv Studios, Scotland’s largest manufacturing facility; New York’s Kaufman Astoria Studios in Queens (the Twenties authentic residence of Paramount Photos); and the 2 largest movie studios in Eire, Ardmore Studios and Troy Studios. It additionally pacted with the Metropolis of Toronto to develop a waterfront advanced, Basin Media Studios.

Different Hackman Capital properties embrace The Culver Studios; Tv Metropolis; MBS Media Campus; Raleigh Studios in Hollywood and Saticoy; Sony Photos Animation Studios (in LA); Second Line Phases in Louisiana. Eastbrook Studios in London is presently beneath development, as is a state-of-the-art studio advanced in Downsview in northwest Toronto. The Wharf Studios, a brand new campus in London, opens in January.

That’s 16 studios, quickly to be 19 when offers shut, with extra than120 energetic soundstages and one other 90 deliberate or in improvement, for nicely over $10 billion in studio belongings.

“In each market the place we open, demand has exceeded the availability. Sooner or later that may come into stability,” Hackman stated — simply not anytime quickly.

In a uncommon interview, the longtime actual property developer tells Deadline how changing into a supporting participant for movie and TV manufacturing was the enterprise alternative of a lifetime, and when it first began for him in Culver Metropolis.

DEADLINE: Hackman is a key participant within the leisure trade, however many Deadline readers might not know you. What’s your backstory?

MICHAEL HACKMAN: I grew up in Columbus, Ohio, certainly one of 5 kids. Two sisters (and my two kids) work with me within the enterprise. I graduated from the Ohio State College, moved to L.A. in 1978, and launched my firm in 1986, targeted on industrial actual property [warehouses, factories] build up a portfolio of greater than 400 buildings totaling over 35 million sq. ft. By 2005, I used to be on to the following idea, city infill [developing sites in a market that’s already mostly built out]. I began to give attention to Culver Metropolis as a result of I lived in L.A. It was dynamic, had three metro rail stops deliberate, a terrific future, a terrific location. We began to purchase up buildings, specializing in artistic workplace improvement. Considered one of our first tasks was the 150,000-square-foot artistic workplace campus within the Hayden Tract, which was then leased to Beats by Dre. Then Apple purchased Beats.

DEADLINE: That’s a step nearer to leisure. When, why the bounce into studios?

HACKMAN: In 2014 we purchased The Culver Studios—the historic 1918 web site the place Gone With the Wind, Citizen Kane, ET, The Matrix and plenty of others had been filmed—and launched into an innovation plan that might modernize and greater than double the lot, whereas preserving the historic constructions. Finally Amazon turned our tenant.

On the similar time, I met Rick Nelson, CEO of The MBS Group, which gives lighting and grip rental tools and manufacturing providers, and likewise operates movie and TV studios. He was based mostly at MBS Media Campus, then referred to as Manhattan Seashore Studios. We began to actually examine the enterprise. Expertise and broadband had been creating, and it was clear to us the place issues had been headed. We knew there was going to be progress, and that it might be a game-changer.

Then on the finish of 2018, we had the chance to purchase CBS Tv Metropolis–25 acres within the middle of L.A., among the finest places within the metropolis. We had been in a position do this deal in 2019, a seminal second, after we additionally had the chance to buy The MBS Group and the MBS Media Campus [from Carlyle Group]. As soon as that occurred, every part took off. We had been no longer solely in a position to purchase studios, but in addition in a position to present important providers to the content material trade. We labored onerous with the MBS group to develop their providers and footprint. [Editors note: MBS has over 850 employees, services almost 400 soundstages through 65 locations, and supports more than 400 productions annually.]

DEADLINE: How would you characterize the soundstage market?

HACKMAN: Extremely aggressive. In L.A. there are 500-plus soundstages. Hackman Capital Companions, as huge as it’s, owns about 70. In New York, there are 255 soundstages, we personal 38. We don’t have a controlling place in anybody market, and it’s not our intent to take action. We work with many different homeowners and firms to service their studios.

In every of the most important markets like L.A. and New York there’s near 100% occupancy. They flip over from one present to a different. In each market the place we open, demand has exceeded the availability. Sooner or later that may come into stability. New York particularly is a vastly underserved market. It wants extra phases but in addition larger ones. Solely about 50 of New York’s soundstages are larger than 15,000 sq. ft.

[Editors note: A few more will come online with Lionsgate Studios from Robert Halmi and Fehmi Zeko’s Great Point Capital — with the studio as long-term anchor tenant – set to open in Yonkers. And Steiner Studios is branching out from its Brooklyn Navy Yard home to build a second studio complex in Sunset Park, Brooklyn. They are among developers and private equity firms including Hudson Pacific Properties and Blackstone (Sunset Studios in L.A.), TPG Real Estate Partners (Cinespace Studios in Chicago and Toronto, Babelsberg in Germany), Commonwealth Group (Blackhall Studios in Atlanta), and a handful of others who have moved into the soundstage space.]

DEADLINE: Why the growth? Streamers and media firms are spending billions of {dollars} on content material. Is it simply that extra content material is being produced?

HACKMAN: Sure, however not solely that. Soundstages are additionally in demand due to progress in expertise as nicely. You’ll assume it might be the reverse, however expertise allows producers to do extra on a soundstage than was beforehand doable. For instance, digital manufacturing is changing into a sport changer because it permits producers flexibility — they’ll keep away from taking the touring circus out on location. Basically, there’s additionally important worth to being on an actual studio lot the place you’ll be able to management who goes in or out, to not point out controlling manufacturing prices and timelines, plus producers have extra artistic freedom. This has develop into much more essential with Covid. A stage is self-contained, and a studio lot gives the flexibility to create an ecosystem to fulfill all of your manufacturing wants inside one campus. The studio idea has been round for over 100 years however has develop into much more essential as we go ahead.

The Wharf in London - Credit: Hackman Capital Partners

The Wharf in London – Credit score: Hackman Capital Companions

Hackman Capital Companions

DEADLINE: You pressured that you’re not within the content material enterprise?

HACKMAN: We’re not within the “content material creation” enterprise. In the event you equate content material to mining gold, our enterprise is to produce the pots, the pans and the denims, all wrapped in a blanket of nice service. We wish to make sure that all of our clients get every part they should make one of the best content material doable. Our enterprise has grown manner past property infrastructure to manufacturing logistics, and to offering an entire bundle of turnkey providers to our clients. Along with best-in-class services, we’re offering instruments to assist content material creators flip their imaginative and prescient into actuality.

The very first thing that Rick Nelson taught me is that the phrase “no” doesn’t exist on the earth of manufacturing. You discover a solution to make it occur. An enormous a part of what the agency does is manufacturing planning and advisory providers for content material creators, serving to them discover a residence for his or her reveals whether or not or not it’s on certainly one of our properties.

DEADLINE: Is it enjoyable?

. - Credit: ViacomCBS

. – Credit score: ViacomCBS

ViacomCBS

HACKMAN: It’s enjoyable. I grew up within the ’60s and ’70s. I at all times cherished tv and films. Lots of the reveals I cherished had been filmed at CBS Studio Heart. The enterprise is thrilling. I marvel at it. It by no means will get previous for me. I’ve been by way of so many soundstages, and each time I see the units, I’m completely in awe of the expertise that exists on this trade. The quantity of expertise and the way onerous everybody works under the road is unbelievable; that’s the most spectacular a part of the enterprise.

A few of the studios now we have purchased have historic parts, and it’s extremely rewarding to rework them into state-of-the-art services. I deliver this ardour from my actual property background, to actually take these iconic studios again to their glory. It’s actually thrilling to renovate and rebuild an present studio, but in addition to place your footprint on constructing one thing new and inventive, whereas serving to to positively affect communities and create jobs.

DEADLINE: Clarify the studio system of hub and spoke. It’s not only for airways anymore apparently?

HACKMAN: The hubs would come with L.A., New York, Toronto, Vancouver and London. The spokes are markets like Atlanta; Louisiana; Albuquerque, New Mexico; Eire; Scotland. Spokes may be overflow markets or simply smaller up-and-coming markets that may additionally stand on their very own. Jason Hariton, Chief Actual Property Officer of The MBS Group, coined the phrase “hub and spoke” for studio house when he was head of worldwide manufacturing operations and actual property for Netflix.

Jason Hariton

Jason Hariton

Hariton, whom you may say is a Hackman secret weapon, oversaw 1,000 productions a yr on the big streamer. He’s fourth technology within the enterprise; his great-grandfather was a Hollywood driver, his grandfather labored at Paramount, and his father at Common. Jason makes positive we’re constructing or shopping for the precise belongings in key hub-and-spoke markets, and that we proceed to develop that manner all over the world. All of our firm’s success is feasible as a result of now we have an exceptional group.

In New York, now we have Silvercup and Kaufman Astoria. In Toronto now we have two offers, on the waterfront and a big studio on 48 acres. We’re on the lookout for tasks in Vancouver, the place MBS already manages studios and providers soundstages.

MBS has a Canadian group with 200 folks, and a bunch in London of round 150 folks, the place now we have Eastbrook Studios, The Wharf, MBS Improvements Lab and try to do extra.

In L.A., now we have MBS Media Campus, The Culver Studios, Raleigh Studios, the Tv Metropolis and shortly to shut on CBS Studio Heart. We don’t personal manufacturing services in Atlanta, however MBS providers most of them.

DEADLINE: You talked about a window for soundstage provide and demand to come back into stability. How lengthy?

HACKMAN: We’re working onerous to satisfy the meteoric demand. The expansion in viewership all over the world, mixed with the growing entry to broadband, will proceed to create new clients for streamers in the long run, and main studios in main hub-and-spoke markets will proceed to be the essential facilities for content material creators.

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