In today’s entertainment industry, tax policy has become as critical as talent. States offering production credits are reshaping where billions of dollars in film and television spending flows, pulling projects away from traditional hubs and fundamentally altering the economics of studio real estate.
Nowhere is this shift more visible than in Greater Los Angeles, long synonymous with the global film industry. In the immediate aftermath of COVID-19, the region appeared to be rebounding. According to Film LA, On-location shoot days surged from 18,993 in 2020 to 37,709 in 2021, signaling a rapid return of production activity. That surge also drove a wave of real estate investment, with developers accelerating adaptive reuse projects and breaking ground on new studio developments to meet anticipated demand.
But that recovery proved short-lived.
According to FilmLA, since 2021, shoot days have steadily declined, falling to 36,792 in 2022, 24,873 in 2023, 23,480 in 2024 and just 19,694 in 2025, a level approaching pandemic-era lows. What initially appeared to be a cyclical rebound now reads more like a structural reset.
Part of this decline reflects a broader slowdown in content production. According to FilmLA, total scripted releases in 2024 fell 13.4% to 857 projects, reducing the overall demand base. But the more consequential shift is geographic. Production is not simply shrinking; it is moving. States and countries, armed with aggressive incentive programs, are competing to attract studios, effectively turning production location into a race to the bottom.
That competition has intensified across North America. California has expanded its annual incentive funding to $750 million, while New York maintains a 30% base credit. New Mexico continues to market a 25% base credit with a potential 40% maximum, Texas has moved toward more stable funding structures, and British Columbia has increased credit rates to reinforce Vancouver’s position as a leading alternative production hub.
The impact of these policies is measurable. According to the Los Angeles County Economic Development Corporation, productions that failed to secure California tax credits and subsequently relocated generated more than $1 billion in spending in competing U.S. markets, including Georgia, New Mexico, New York, and Louisiana. An additional $2 billion in production spending flowed to international locations such as Canada, the United Kingdom, and Australia.
For real estate owners, this shift creates a fundamental dilemma. Do you hold out for a rebound in legacy markets like Los Angeles, betting that production will return as incentives stabilize and content spending recovers? Or do you adapt, repositioning assets for alternative uses in a market where demand is no longer guaranteed? For some, the answer may be to exit entirely, redeploying capital into markets where production growth is more closely aligned with policy support.
This is not a typical cyclical downturn where patience alone is rewarded. The underlying drivers of demand have changed. Production is increasingly mobile, tied less to infrastructure and more to incentives, cost structures, and policy certainty. In that environment, the key question is no longer whether demand returns, but whether it returns here.
The impact on film industry-related real estate has been significant. Netflix is in final negotiations to acquire the historic Radford Studio Center in Studio City, California, for approximately $330 million to $400 million as of April 2026. This strategic move represents a massive valuation reset for the 55-acre lot, which was sold for $1.85 billion in 2021 before the previous owner, Hackman Capital Partners, defaulted on a $1.1 billion mortgage, allowing creditor Goldman Sachs to take over.
The acquisition marks a shift in Netflix’s strategy from leasing to owning major production infrastructure in Los Angeles. If finalized, this transaction will solidify Radford as a primary hub for Netflix’s content production.
Key Details of the potential deal are as follows:
- Property & Value: The 55-acre site features 22 soundstages and has been a cornerstone of Hollywood history since 1928, hosting productions like Seinfeld, Gilligan’s Island, and The Mary Tyler Moore Show.
- Discounted Price: The rumored $330M–$400M price tag is less than 33% of its 2021 valuation, highlighting a downturn in the L.A. studio real estate market.
- Strategic Rationale:Netflix is nearing the end of its 10-year lease at Sunset Bronson Studios (expiring in 2031) and seeks a permanent, owned Los Angeles hub.
- Production Slowdown: The deal follows a period where Hackman Capital defaulted after failing to modernize the lot amid a, according to 2026 reports, 62 percent vacancy rate in local soundstages.
- Expansion: Netflix has expanded its owned infrastructure, including projects at Fort Monmouth in New Jersey and Albuquerque, New Mexico.
This deal signals a “new era” for Hollywood, with streaming services consolidating control over production facilities while traditional production in California faces pressure from rising costs. It may also signal a significant restructuring in entertainment-related real estate. As a result, entertainment real estate owners may increasingly need to view studio assets as operational real estate whose value is directly tied to incentive policy, production economics, and tenant concentration risk.
