Demand for LA sound stages now far outpacing supply

A building at Hollywood Center Studios and Hudson Pacific Properties CEO Victor Coleman (Credit: Wikipedia, HPP)

Studios space has become one of the hottest real estate commodities in town, thanks to to the rising popularity of online videos and the so-called renaissance of television.

As such, the demand for these spaces has begun to far outpace the supply.

“Sound stages have historically run at a utilization rate of about 70 percent,” JLL international director Carl Muhlstein told the Los Angeles Times. “Today, many are running at close to 100 percent.”

Hudson Pacific Properties, which just bought the former Hollywood Center Studios for $200 million, is the largest independent owner of stages in Hollywood. Its senior vice president, Bill Humphrey, said utilization of space is in the 90 percent range — a historic high.

Humphrey added that long-term leases, as opposed to the typical production-by-production deals, will likely become the norm as a result.

The supply demand dynamic has sent rents way up. At L.A. Center Studios, where “Mad Men” was filmed, the rent has increased 3 percent a year for the past three years.

The high demand is compounded by California’s expanded tax incentive program that entices filmmakers to stay in California for their productions. The film and TV tax credit program recently saw its funding triple to $330 million annually. [LAT]Cathaleen Chen