As California lawmakers in Sacramento deliberate on enhancing the state’s film incentives, the urgency is palpable given the alarming state of production in Hollywood. Recent reports indicate that soundstage occupancy in Los Angeles has plummeted to its lowest level since FilmLA began tracking in 2016.
According to FilmLA President Paul Audley, average occupancy rates for LA soundstages stand at just 63% for 2024. This statistic, shared during Bisnow’s Los Angeles Studio Real Estate Conference held at East End Studios’ Glendale campus, underscores the financial strain faced by the industry.
“As you know, that’s below a return on your investment when your occupancy is at that level,” Audley remarked, addressing the audience.
The first quarter of 2024 saw even lower occupancy rates, though Audley refrained from disclosing specific numbers. He attributed this decline not only to intensified competition between filming locations both nationally and internationally but also to a surge in new soundstage constructions around the globe.
In 2020, the United Kingdom boasted 3.5 million square feet of soundstage space, a figure projected to double to 7 million square feet by 2025. Likewise, Georgia reported 2.3 million square feet of soundstage space in 2020, which is anticipated to near 4.3 million square feet by 2025.
Audley noted, “Some of their building projects have come offline, as they will here as well. But they’ve really been doing advanced, modern, new stages very quickly in Great Britain, knowing the value that they’re getting from the major features.”
This influx of soundstage space in competing states poses a significant challenge to California’s entertainment industry, which has seen a gradual decline in soundstage occupancy. After peaking at 96% in 2016, occupancy rates remained above 90% until after 2022, according to FilmLA. However, by 2023, the average annual occupancy had fallen to 69%.
While early figures for the second quarter of 2024 hint at some modest recovery, Audley believes the improvement is insufficient to alter the overall trend significantly. “2016 was our peak year. It’s been going down ever since, as it has worldwide,” he explained, referencing the impacts of the COVID-19 pandemic, which initially caused a temporary spike in production as the industry attempted to catch up.
The entertainment sector is undergoing substantial transformations, notably reducing expenditures on new shows, series, and overall content production hours. This shift is corroborated by an early 2025 report from Luminate, a data provider focused on industry trends.
The complexities of the industry landscape have also been magnified by rising interest rates, inflation leading to a spike in construction costs, and a volatile economic climate. These factors, as articulated by East End Studios’ Managing Principal Jonathan Yormak, have forced the industry to explore opportunities outside of Los Angeles.
Yormak commented, “All of these things have created a pretty volatile environment. I think where we find ourselves today is, hopefully, coming out of that storm.”
In light of these challenges, lawmakers in Sacramento are considering film tax credits aimed at bolstering production in California and restoring competitiveness to Los Angeles. Despite such efforts, Audley indicated that the broader contraction in the industry may yield an unexpected benefit by causing some jurisdictions that have entered the marketplace to reconsider their spending on soundstage development.
“We’re hoping – and fingers crossed – that because of a global reduction in the production of film and television, these other jurisdictions that are smaller and are trying to enter the marketplace by spending this money will pull back and pull out,” Audley said, albeit with caution.
He also emphasized the importance of continuing the construction of modern soundstage facilities, stating that without state-of-the-art offerings, California might struggle to attract potential producers. Audley stated, “One of the things we hear back from major producers is, ‘We need modern, new, large stages in LA in order to come and in order to stay.’”
FilmLA’s latest report has identified 13 soundstage projects currently in progress, from those actively under construction to those in the entitlement phase. Notably, East End Studios’ Mission Campus project in Boyle Heights and Echelon Studios, developed by Bardas Investment Group and Bain Capital in Hollywood, are expected to complete within the next year.
Audley noted that these projects would collectively introduce 10 new stages to the market. However, he cautioned that many intensive projects in the entitlement phase risk being delayed or paused unless they secure preleases.
As the state grapples with the evolving dynamics of film production and soundstage availability, the potential for legislative change could be pivotal in revitalizing California’s storied place in the entertainment industry.
image source from：https://www.bisnow.com/los-angeles/news/construction-development/los-angeles-studios-event-east-end-studios-129602
