Sunset Pier 94 Studios: Transforming Manhattan's Studio Landscape

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Episode Transcript:

Today, we delve into the latest moves in the world of commercial real estate. Big players are making bold bets, and we're here to break down the details.

In a noteworthy collaboration, Blackstone, a heavyweight in the investment realm, is teaming up with Vornado Realty Trust and real-estate investment trust Hudson Pacific Properties to embark on a groundbreaking venture. A whopping $350 million is being invested into the development of Manhattan's very first major production-studio complex.

The motivation behind this venture? A bet that the demand from streaming services is potent enough to outweigh Manhattan's formidable development costs. The plan is to set the stage, quite literally, by breaking ground later this year on a sprawling 266,000-square-foot campus on a Hudson River pier.

Picture six expansive soundstages, complemented by office spaces, writers' rooms, and other essential support facilities. This ambitious project, known as Sunset Pier 94 Studios, doesn't just stop at production. It's integrating public amenities into New York City's bikeway and park system along the Hudson River, aiming for a holistic urban experience.

And when's the grand unveiling? The developers have their sights set on completing the project by the close of 2025. Michael Franco, president of Vornado, known for its prowess in office and retail development, is optimistic: "We'll raise the bar for one of New York City's signature industries and breathe new life into a key waterfront site."

Now, it's worth noting that New York City already ranks as the second-largest studio site in the U.S., trailing behind Los Angeles. However, major studio facilities have typically nestled in Queens due to lower development costs. That's about to change.

The growth in streaming services like Paramount+, Peacock, and Disney+ has fueled an increasing appetite for sound stages and production facilities. This trend has led to higher rents and prompted fresh studio development in various markets. The developers behind Sunset Pier 94 Studios are confident that their state-of-the-art production facilities in Manhattan can command top dollar rents.

Despite the challenges faced by Hollywood and the streaming industry, these developers are marching forward. A notable point is that the strike in the show business has impacted production, with shoot days seeing a sharp drop. However, industry insiders believe that pent-up demand will follow once the storm subsides.

Sunset Pier 94 Studios is setting a stage of its own, offering stages of around 14,000 square feet each. This size is perfect for shooting series episodes and short-form content that's popular on mobile devices. Feature films, on the other hand, usually require larger stages of up to 30,000 square feet.

With a long-term lease of Pier 94 and a 49.9% stake in the venture, Vornado is bringing its expertise in developing Manhattan properties to the forefront. On the flip side, Blackstone, known for its massive investments, holds a 24.5% stake, while Hudson Pacific owns 25.6% in Sunset Pier 94 Studios.

This is Tyler Cauble, signing off