Studio Leasing Market Is Thriving in NYC

The film industry is a silver lining in New York City’s otherwise lackluster leasing market. Content creation—which has expanded during the pandemic—is driving the demand for high-quality production space, which includes small broadcast studios in office buildings, raw space in warehouses and professional production facilities with insulated soundstages, according to new research from CBRE.

Production space in New York City is predominately owned by five studios—Broadway Stages, Silvercup Studios, Steiner Studios, Grumman Studios and Kaufman Astoria Studios—which collectively own 60% of the total production space in the market. In addition, television companies are the most active users, occupying 17.1 million square feet or 60% of the studio space market. Manhattan is home to over 150 production and post-production companies that occupy some two million square feet of office space. However, the demand is starting to exceed supply.

This year, a handful of significant leases and new projects are already making a splash. Wildflower Studios and Netflix are building studio complexes in Queens and Brooklyn, and Lionsgate has leased a new studio complex currently under construction in Downtown Yonkers. All three companies are new arrivals to the market. Plus, Broadway Stages expanded to Astoria, and the NYC Economic Development Corporation selected Steiner Studios to operate a new 500,000 square foot film production hub under development in Sunset Park, Brooklyn. Overall, more than 30 new soundstages will deliver into the market by 2030, according to the CBRE report.

Existing tenants are also expanding in the market. Apple TV+ signed on to occupy 75,000 square feet of production space at Kaufman Astoria Studios, plus 15,000 square feet of office space at the property.

The local government is supporting future growth of the film industry. The New York State Film Production Tax Credit has been renewed through 2025 with annual funding of $420 million. This has helped to support film growing production permits. In 2013, there was an average of 695 permits per month, and by 2019, that increased to 713 permits per month. New Jersey also renewed its filming program, through June 2028, increasing funding from $75 million annually to $100 million annually.

The market is also attracting capital investment. In October, Hackman Capital Partners and Square Mile Capital acquired the independent film and television studio, Silvercup Studios in New York City, through an affiliated entity. The purchase includes the property’s operational components and equipment. The transaction is the seventh acquisition made by Hackman Capital Partners and Square Mile Capital’s media platform, and is the media platform’s entry into the New York content production market.