Behind the Deal: Manhattan’s First Purpose-Built Film and TV Studio Campus
The tailwinds in the content creation space are powerful: annual spending on original content increased by approximately 2x from 2020 through 2022 and streaming platform subscribers have grown at a double-digit pace annually over the same period. At Blackstone, we’ve been investing in the content creation space across the firm, from studio space in the United States and Europe to businesses like Candle Media, a next-generation media company. This growth in content also leads to growing demand for data storage, further fueling our interest in investments around data centers, such as QTS, whose size has tripled in just two years through new leasing.
The recently passed New York State budget will increase annual tax credits for productions from $420 million to $700 million, making the state an even more compelling location for productions and in turn spurring additional demand for studio space. In New York City alone, annual production spend has increased by 25% over the past two years, despite a lack of purpose-built studio infrastructure to support this growth.
In partnership with the NYCEDC, we are excited to revitalize Pier 94 and help meet the demand for studio space in Manhattan. When complete, Sunset Pier 94 Studios will enable high-quality TV and movie content to be filmed in the heart of New York City, contributing millions annually to the local economy.
Why are we interested in studio space?
Nadeem Meghji: As investors our objective is to generate strong performance, to understand how the world is changing then find real estate assets that benefit from those trends. So, when we see growth in AI and in the cloud, we invest in data centers. When we see growth in e-commerce, we invest in warehouses. We asked ourselves, how do we play into this trend around content creation—around growth in streaming—from a real estate lens? It became clear that investing in the studio business was a way to express this view.
With Sunset Pier 94 Studios, we are now invested in the top three locations for content creation globally—Los Angeles, London and New York City.
What are we building at Pier 94?
Mackenzie Berman: With our partners Vornado and HPP, we’re developing a 266,000 square foot studio facility that’s going to be on the West Side of Manhattan at Pier 94. It will include six state-of-the-art soundstages that cater to all types of film and television production, including live audience programs. Our stages will also have the technological infrastructure for virtual production, a fast-growing technology in the studio industry.
Jacob Werner: Part of the project will also include revitalizing the pier itself, which has been underutilized for the past decade. Our development will include building public amenities that serve the adjacent Hudson River Park, and will include a new pedestrian walkway around the pier with incredible skyline views.
Why was New York City the desired location for this development?
Mackenzie Berman: When you think about how many TV shows and movies are set in New York City—and in Manhattan specifically—you’d think there were dozens of large studios nearby. In reality, there are only a handful of smaller soundstages in Manhattan, which cannot handle newer production specifications. This is going to be the first purpose-built production facility in Manhattan, which is a top desired location for talent within the broader New York City market and creates strong natural demand for studio space here.
Plus, the location of the studio at Pier 94—54th Street and 12th Avenue—is close to popular outdoor filming locations in Manhattan like Times Square, Central Park and the New York Public Library, which makes it especially convenient for productions that require filming both on location and within sound stages. It’s also very close to the office hubs for big content creators like HBO, CBS and Disney. We’re planning to break ground imminently and expect to deliver the facility within the next two to three years.
Jacob Werner: This investment demonstrates our continued commitment to New York City and our conviction in investing in this market because it is a hub for talent. That’s especially true in entertainment and media. We believe we have all the ingredients to do something really special.
How were we able to get this deal done given the current environment?
Jacob Werner: We’re fortunate to be able to utilize the scale of the Blackstone platform to inform and reinforce the trends we’re seeing. We were able to get insight from Candle Media, one of our private equity portfolio companies, about where they saw the biggest need for studios.
Furthermore, we benefited from strong relationships with Vornado and HPP, enabling us to pull this transaction together.
Mackenzie Berman: New York City is one of the biggest partners in this as well. This is a true public-private partnership because we worked hand in hand with the New York City Economic Development Corporation to restructure the ground lease and commit to invest capital to reinforce the pier. It’s a special situation where we’ve been able to partner with all parties to creatively develop the best studio complex in New York City. It is truly a win-win-win-win.
Certain information within this article was obtained from an economic impact analysis prepared by AKRF, Inc. and sponsored by a joint venture of Blackstone, Vornado Realty Trust and Hudson Pacific Properties. Blackstone has not independently verified, and no representation is made, as to the accuracy of such information. Such information is subject to change without notice and may differ from opinions expressed by others. Any projections, expectations or other forward-looking statements set forth herein are based on assumptions that are believed by Blackstone to be reasonable as of the date hereof. Actual results are inherently uncertain and may vary materially from the themes set forth herein.