The New York tristate metropolitan area's film and television industry, after having been shut down by the COVID-19 pandemic and last year’s labor disputes, is showing signs of a real estate comeback.
In one telling example, Manhattan office leasing by media-related firms, including streaming services, video game makers and cable providers, has risen to 123,000 square feet in the first half of this year, double the full-year leasing volume of 61,000 square feet in 2023, according to a CBRE study released Thursday. By that rate, the increase would mark the entertainment industry’s first annual office leasing increase in the market since 2021.
In contrast, Manhattan's total office leasing in the first half of 2024 rose at a slower 35% to 11.1 million square feet from a year earlier, a separate CBRE report found.
Meanwhile, motion-picture employment in the tristate area, after having declined to 40,520 in the third quarter of 2023, the lowest level since it fell below 40,000 in 2010, has risen to 44,508 in the fourth quarter after the end of the Writers Guild of America and SAG-AFTRA Screen Actors Guild strikes, CBRE said. Media acquisition activity, after slowing in 2023 with only four deals, also was “off to a strong start in 2024 with four deals closed through May 2024,” CBRE said.
“Now that labor disputes have been resolved, the industry appears to be rolling once again, reabsorbing workers that were let go and reoccupying soundstages that had been sitting quiet,” CBRE said.
While the labor strikes have hurt all major North American markets, the New York region “rebounded relatively quickly” after the strikes ended. The number of active projects in New York and New Jersey in the first quarter of 2024 rose to 142% of the pre-labor dispute level, the highest of any North American market.
The area’s film industry has come "full circle" since a revitalization that began in the 1980s and 1990s led to studio expansion, thanks in part to tax incentives, CBRE said.
Greater New York’s existing soundstages have expanded to a total of 3.4 million square feet this year — a figure still less than half of Los Angeles’ 7.3 million square feet and shy of Ontario, Canada’s 3.8 million square feet and Atlanta’s 3.4 million square feet. The New York metro area, however, tops the 2.5 million square feet in British Columbia, Canada, CBRE data shows.
Recent Additions
New York has seen a growing number of “big-budget” purpose-built film and television production spaces, CBRE said. For instance, they include Steiner Studios’ 2018 expansion at the Brooklyn Navy Yard and Kaufman Astoria’s ONStage expansion, which started in 2021, CBRE said, adding Lionsgate, Netflix, and Robert De Niro's Wildflower Studios are all opening ground-up production campuses that “meaningfully” add to “the region's inventory of high-quality stage space.”
The region, with its “rich industrial legacy,” also has a “trove of expansive, column-free spaces with ample parking and relatively high ceilings” that make them “ideal” to be redeveloped for larger productions, CBRE said. It pointed to Silvercup Studios, which was transformed from the former Silvercup Bakery in Long Island City in 1983 and a former Long Island aircraft factory that has become home to Grumman and Gold Coast studios.
Improving signs aside, New York, like other major studio markets, still faces challenges. For one, while entertainment firms are claiming office space again, leasing is likely to remain “well below” the pre-pandemic level, according to CBRE. Meanwhile, the slowing growth rate in the number of global streaming subscriptions is “forcing networks and streaming platforms to reassess their expansion strategies,” CBRE said. Separately, even as New York’s soundstage inventory is “rapidly modernizing,” it remains, on average, “older and smaller than competitor markets in North America,” CBRE said.
“Despite the sound fundamentals, the budding industry faces risks,” CBRE said.