The most destructive wildfires in California history won't stop the Los Angeles entertainment sector's slow recovery from crippling strikes, the pandemic and a global decline in production activity, according to the largest West Coast landlord of soundstages.
Many productions were paused or delayed due to the wildfires in January, but Hudson Pacific Properties is now seeing an uptick in stage leasing inquiries, not just in number, but in quality, according to executives of the owner and operator of 2.1 million square feet of soundstage space in Los Angeles and New York City.
"We are beginning to see high caliber shows returning and looking to ramp up production later in the year, " CEO and Chairman Victor Coleman said in a statement.
Inquiries are coming from long-running first-season episodic television shows that are the bread and butter of Los Angeles production, with requirements for multiple soundstages as well as robust lighting and production packages, Coleman told investors on an earnings call.
Demand is expected to grow further after the proposed California film tax incentive increases go into effect, he added.
Hudson Pacific lost $167 million during the fourth quarter, largely due to a write down on the value of the Quixote studio support business — which rents production trailers, trucks, lighting and other equipment to producers — by $110 million. Nevertheless, the firm has confidence in its ability to trim costs and boost profitability at the business moving forward, Coleman said.
Renewed interest
Los Angeles production business was picking up before the wildfires, with 86 shows filming on company properties in the fourth quarter, up from 84 shows in the prior quarter. The company's stages were 77% leased compared to 76% the prior quarter thanks to increased activity at Sunset Las Palmas studios in Los Angeles.
Though the fires delayed some productions, they also helped shine a spotlight on the need for activity to boost recovery, Coleman said.
Hudson Pacific is part of the California Production Coalition, which is working with other industry groups to push for additional state and local program enhancements and commitments from media companies to increase local production. Other groups involved in similar goals include Stat in LA and Steadfast LA.
"Whatever acronyms you want, they’re all coming to the table, and that is transferring to more than just interest, but holds on stages and production being greenlit going forward," Coleman said.
Other tailwinds for the industry include rising profitability for streamers like Disney, Warner Bros., Discovery and Paramount, Coleman added.
Meanwhile, Hudson Pacific will "continue to look for ways to right-size the Quixote business," including shuttering the company's one-soundstage New Orleans operation, President Mark Lammas said on the earnings call.