Los Angeles Mayor Karen Bass was joined last month by development executives, entertainment workers and city officials downtown to tout the opening of a gleaming new soundstage campus. But the $230 million complex built by East End Studios is still unleased, a sign of doldrums for the once-glimmering entertainment capital.
Despite the stagnation, some investors are in development mode as the region looks to use newly built real estate as a means to keep the production focus on the city and what it has to offer following years of muted filming activity.
The just-opened Mission Campus in the Arts District, a 255,000-square-foot complex with five soundstages, wrapped construction roughly a year after breaking ground, aided by a streamlined permitting process implemented by the Mayor’s Office of Business and Economic Development. The complex represents the type of property popular with producers: stages that can handle large-scale sets, nearby support space that keeps crews and equipment on site, and systems designed to keep shoots moving on tight schedules.
“L.A. is the creative capital of the world,” Bass said at the East End Studios opening ceremony. “Our entertainment industry is core to this city’s economy.”
Though no deals have been solidified, major streaming platforms and entertainment networks have toured the site, people familiar with the property tell CoStar News. The opening comes as film and television executives are cautiously optimistic about a production rebound in 2026 in Los Angeles and across the U.S.: a survey by data firm ProdPro last month showed expectations for higher output than in 2025, even as labor talks and industry consolidation remain risks.
Two other major projects — the roughly $450 million Echelon Studios in Hollywood and Cinespace Los Angeles in Woodland Hills — are set to add 11 soundstages in 2026. Legacy studio campuses are also planning redevelopment and modernization.
That expansion is colliding with a softer production market — nonprofit industry tracker FilmLA reports soundstage occupancy in the low-60% range. That is well below the roughly 90% levels seen during the 2020 streaming boom.
Developers are betting on a flight to quality for entertainment real estate, a phenomenon that’s similar to what’s unfolding across office and retail property. Older production real estate without stage-adjacent support space, or debt-ridden properties still struggling to recover from the 2023 writers’ strikes, are now hitting the sales market at a discount as sellers contend with diminished occupancy and activity.
Newness alone won’t guarantee tenants, as shifting market dynamics — from production tax incentives to studio affiliation — play a growing role, said Carl Muhlstein, a longtime Los Angeles broker and principal at Studio City‑based Muhlstein CRE.
“It’s a reset of the market economics and no longer just an issue of ‘I have the best facility,’” he told CoStar News. “More productions are migrating to landlords that have a financial stake in their product.”
Modern studios
While Los Angeles is the capital of movie production, it is facing increased competition from other countries — including Canada and the United Kingdom — and states such as New York and Georgia that are boosting tax incentives and soundstage development to lure productions.
These days, 120 jurisdictions around the world offer production incentives, many of which are larger, more efficient and easier to use than California’s program, according to a statement from Joseph Chianese, senior vice president of production incentives at Entertainment Partners. That Los Angeles-based company provides digital production management and finance services to the entertainment industry.
In Los Angeles, East End Studios’ Mission Campus joins a wave of recently completed or under-construction properties designed to compete on infrastructure rather than location alone, pairing larger stages with integrated offices, adjacent support space and electrical systems capable of handling modern production loads.
Despite softer production demand, developers are continuing to push forward with large studio projects, betting that tenants will ultimately gravitate toward the newest and most efficient facilities, according to CBRE Senior Vice President Nicole Mihalka.
While development or leasing costs “might be higher on a newer facility than in an older, more traditional facility, it can sometimes shake out that the newer facilities are less costly over time,” Mihalka said, pointing to reduced electricity and power costs, and efficiency from streamlined operations. Recent additions include Worthe Real Estate Group’s Ranch Lot in Burbank, where the Golden Globe-winning show “The Pitt” is filmed, and Hudson Pacific’s Sunset Glenoaks Studios in Sun Valley, which opened last year, as modern alternatives to aging facilities.
Bardas Investment Group and Bain Capital Real Estate are well underway on Echelon Studios Hollywood, a $400 million project that aims to be a one-stop filming shop, with 120,000 square feet of soundstages and production support space, 385,000 square feet of office, 95,000 square feet of private bungalows and 10,000 square feet of restaurants and retail area on its campus. The project is set to open next year.
Meanwhile, Cinespace Los Angeles, positioned as a boutique campus, emphasizes scale and flexibility, with multiple midsize stages and dedicated production-support areas. The project, set on 10 acres in the San Fernando Valley’s Woodland Hills neighborhood, is expected to open this fall with six 18,000-square-foot stages and 70,000 square feet of offices on the site of a former fiberglass yacht factory.
Developer Cinespace Studios is one of North America’s largest independent studio operators, controlling about 100 soundstages across major production hubs under private equity ownership by TPG Real Estate.
Legacy lots upgrade to stay relevant
Because L.A. soundstage occupancy is hovering in the low-60% range, a number of aging properties find themselves competing mainly on price rather than operational advantages.
In 2024, greater Los Angeles had roughly 6.5 million square feet of soundstage inventory, the most of any U.S. city, with another 3.5 million square feet of proposed soundstage space underway, according to the city’s nonprofit booster group FilmLA.
Established hubs that have consistently upgraded themselves, like LA Center Studios downtown and Hudson Pacific Properties’ collection of high-end studios in the heart of Hollywood, have remained booked and busy, real estate brokers say.
Hackman’s historic Television City studio property in the Los Angeles neighborhood of Beverly Fairfax is undergoing a $1 billion expansion and upgrade. Hackman expects to complete the project at 7800 Beverly Blvd. in 2028, before the Los Angeles Olympics.
Among real estate with dimmer prospects are older properties more isolated from traditional production hubs and with aging infrastructure, including the largely vacant Radford Studios in Studio City. Hackman Capital Partners recently handed back the property’s keys to lender Goldman Sachs when occupancy levels failed to bring in enough cash to cover debt payments. It is also shopping its Saticoy Studios in Van Nuys.
Upgraded legacy campuses can still command strong tenant demand, with Hackman Capital Partners recently securing $165 million in refinancing for the century-old Raleigh Studios in Hollywood, which remains fully leased to Netflix.
While Hudson Pacific’s newer Sunset Glenoaks, located near the San Fernando Valley in greater Los Angeles, has yet to achieve the occupancy the developer had hoped, Hudson’s Sunset Gower and Sunset Bronson studios in Hollywood are almost fully leased to successful Netflix shows, the firm’s CEO, Victor Coleman, said on an earnings call in November.
“We’ve come through what we would call the 100-year storm, and hopefully, we’re coming out of it and may be better off than we think,” Coleman said on the call. “We’re not optimistic yet, but we’re at least seeing the positive signs.”
Upgrading a property can pay off. Owner-users are increasingly stepping into repositioned facilities when renovations align with operational needs, as seen in the $18.5 million purchase of a renovated Burbank studio by an affiliate of comedy streaming platform Dropout.
Entertainment companies still expanding in Los Angeles are increasingly searching for studio space that allows them to cluster production activity into a single, purpose-built campus, Mihalka said.
“The choice between older and newer facilities often comes down to efficiency,” Mihalka said. “A newer stage might have a higher face rate, but modern electrical systems and infrastructure can reduce operating costs enough to offset that.”
Mihalka is leading leasing efforts for the new Echelon Studios campus while also marketing the century-old Occidental Studios in Echo Park for sale, giving her a direct view of how tenant expectations differ between modern campuses and legacy lots.
“We recently had two very serious owner-user prospects tour the property,” Mihalka said of Occidental. “One was a technology-driven content company looking to consolidate operations, and the other was a creative studio group evaluating how to scale into a campus environment.”
Another major factor influencing where new productions lease space is who their investors are. Studios like Fox and Warner Brothers often have an edge in securing leases for shows they financially back, broker Muhlstein said.
Incentives drive activity
Developers nationwide are expanding studio capacity and ramping up filming incentives to better compete for filming business.
Hudson Pacific opened Sunset Pier 94 Studios — the first custom-built movie studio in Manhattan — in January, with Paramount Skydance Corp. signed on as a marquee tenant. Paramount Skydance will also anchor Togus Urban Renewal’s 1888 Studios, a 58‑acre, 23–soundstage complex on the site of a former oil refinery in Bayonne, New Jersey, slated to open by 2028.
Cost pressure continues to shape where and how film and television projects get made. In ProdPro’s January survey, 65% of executives surveyed said tax incentives ranked among their top three levers for cost containment in 2026. On average, producers said about 70% of their slates are shot in the lowest‑cost viable locations. When projects do opt for more expensive markets, executives cited creative or aesthetic needs first.
California studio landlords are banking on a leasing boost from the state’s doubled tax incentives for local productions. In July 2025, the Golden State increased available funds to $750 million from $330 million, putting it on par with competing states like Georgia, New Mexico, New Jersey and New York. While there’s no data yet showing a direct uptick in occupancy, 119 projects have since secured incentives, including 28 new films awarded credits in December.
These productions have 180 days to begin shooting, meaning a wave of work is queued up for the region. In the fourth quarter alone, incentivized projects made up about 13% of all local filming, according to officials.
California’s tax credits “make it possible to invest long‑term in creative talent and sustainable production,” said a statement from Dahlia Guigui, head of production at Sunset Pictures, which recently greenlit two feature films, “Sammy” and “Freaky Deaky,” for first‑quarter 2026 production on the Warner Brothers lot in Burbank after receiving state tax credits.
Critics say California’s tax incentives could go even further to attract more business, such as by investing directly in studio infrastructure, which Louisiana, New Jersey, and other states have done.
“A major limitation of California’s tax credit is that it excludes above-the-line costs — actor, writer and director salaries, which can represent up to 40% of a production budget. Other regions incentivize these expenses, making them more competitive for high-profile projects,” Mihalka said.
Further challenges could be ahead, including entertainment industry strikes and continued consolidation, as mergers such as Netflix’s proposed acquisition of Warner Bros. advance as expected, Muhlstein said.
Still, the response from local developers and states hasn’t been to wait it out — it’s been to keep building.