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Netflix Purchase of First Production Studio to Spread Clout to New Mexico

Streaming Giant Buys Albuquerque Studios, With Plans to Invest $1 Billion
October 9, 2018
Online entertainment provider Netflix plans to buy its first production studio, a 287,000 square-foot facility in Albuquerque, New Mexico, where the series 'Breaking Bad' was filmed, to accommodate its rapid growth in making original films and television series.

Already in rapid space-expansion mode in Los Angeles, streaming-entertainment giant Netflix now plans to invest $1 billion into its first U.S. production hub in Albuquerque, New Mexico, where it is in final talks to acquire the 287,000-square-foot Albuquerque Studios to accommodate its push into original shows and films as the race to dominate the online entertainment industry heats up.

Netflix, creator of shows such as "Stranger Things" and "Orange is the New Black," plans its first purchase of a production studio complex that it expects to bring $1 billion in film and TV series production to New Mexico over the next 10 years and create up to 1,000 production jobs annually.

“Our experience producing shows and films in New Mexico inspired us to jump at the chance to establish a new production hub here,” said Ty Warren, vice president in charge of physical production for Los Gatos, California-based Netflix, in a statement.

The deal, which follows Netflix's expansion in Los Angeles to roughly 745,000 square feet, highlights how significant the online entertainment industry is becoming to commercial real estate as both a tenant and as owner.

Albuquerque Studios includes 100,000 square feet of office space as well as eight production stages in three buildings, according to its website. It is located at 5650 University Blvd. SE and has previously housed productions of popular series such as "Breaking Bad" and "Better Call Saul."

Major movies filmed in part there have included "Avengers," "The Lone Ranger" and "Sicario."

Netflix, which reports 130 million paid memberships, already produces programs at the site including supernatural drama "Chambers" and suspense drama "Messiah." Previous Netflix productions in New Mexico have included western-oriented movies and TV series such as "Godless," "The Ridiculous Six" and "Longmire."

New Mexico state and local government officials said the move to bring Netflix to Albuquerque was facilitated through funding from the state’s Local Economic Development Act that includes as much as $10 million from the state and as much as $4.5 million from the city of Albuquerque.

“The city has leveraged the groundwork laid over the years by our partners in the film and TV industry and we’ve made sure that film and the creative economy remained a tenet of our economic development plan so we can create accessible, high-paying jobs in this industry,” said Albuquerque Mayor Tim Keller in a statement.

The expansion comes as Netflix and its main rivals in streaming media -- such as Amazon, Hulu, Apple and Google’s YouTube -- boost production of movies and TV series and significantly grow their commercial real estate footprints in the process.

There's nowhere the growth is more pronounced than the media production capital of Los Angeles.

The announcement follows Netflix's news last week it has leased an additional 328,000 square feet in Hollywood to expand its footprint in Los Angeles to roughly 745,000 square feet. Its space in the city now surpasses the 600,000 square feet the company occupies in its headquarters city of Los Gatos, according to its latest SEC filing.

Property brokers say they expect more real estate expansion and flux amid a recent flurry of high-profile media acquisitions by giants including Walt Disney Co., AT&T and Verizon.

Brokers note that Hulu is on the market for as much as 400,000 square feet as it seeks options to grow beyond its current space in Santa Monica, California, where it already occupies nearly 200,000 square feet.

Amazon Studios recently leased more space in Culver City, California, where its footprint now spans more than 350,000 square feet.

YouTube’s Playa Vista, California, operations now total more than 300,000 square feet. Meanwhile, Apple earlier this year leased 128,000 square feet in Culver City, where it is expected to boost its original production of movies, TV shows and other content.

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