King Street Capital Management has partnered with real estate investment trust AIMCo and an unnamed sovereign wealth fund to acquire and develop three production studios in the L.A. market with a total capitalization of more than $500 million.
The three companies, which have formed a joint venture, are working with East End Studios in Glendale on the project, which will deliver about 750,000 square feet of stage and ancillary space.
Two of the development sites are in Glendale, while the third is located near the Arts District in downtown Los Angeles.
“As an active real estate investor, we are drawn to the supply-demand imbalance in the studio sector which we identified through our industry relationships and expertise,” David Walch, a partner at King Street, said in a statement. “We look forward to leveraging our extensive experience to successfully reposition real estate assets in the studio sector.”
One of the Glendale locations, found at 1233 S. Glendale Ave., will be razed for a 90,000 square foot studio and office complex. Preliminary plans for the location include two stages that will account for around 35,000 square feet.
The other Glendale location, found at 5426 San Fernando Road, is currently a storage facility that will be demolished and developed into a 421,000 square foot studio and office complex.
The site, which is more than 9 acres, has preliminary plans for eight stages that will average about 25,000 square feet with additional office and flex/support spaces.
‘Media appetite increases’
Philip Lanzafame, director of community development for the city of Glendale, said the Glendale facilities will be an important piece of Glendale’s entertainment and media cluster.
The studio that will be built in Los Angeles, referred to by King Street as Mission Campus, involves the refurbishment and expansion of an existing cold storage facility. It will feature an office complex and four sound stages ranging from 20,000 to 40,000 square feet.
The multi-studio development project is being completed in a bid to capitalize on heightened demand for studio spaces. Said demand has been fueled by the media streaming race and a lack of spaces to make up for increases in film and tv productions.
“I think the demand (for studio space) is increasing, as our media appetite increases,” Lanzafame said. “You want to be in an area where there’s talent, and I think in all of the San Fernando Valley you get that.”
Lanzafame said Glendale could benefit from the King Street joint venture in the form of a use tax. However, he added that most of the time, in the case of studios, it is the jobs that are generated that end up benefitting the city.
Walch told the Business Journal in an email that the joint venture is looking to secure long-term credit tenants for the properties.
“We are targeting future opportunities in cities where there are natural built-in advantages such as strong talent pool and production crew,” Walch wrote. “Those could include New York City, Toronto, Boston, Atlanta, London, among others.”