Strategic Realignment: Hudson Pacific Properties Announces Closure of Quixote Studios Production Services Business
Quixote Studios has announced the closure of its Atlanta-based production services business and the winding down of its soundstage operations in Los Angeles due to a decline in production activity. Approximately 70 employees in Atlanta and Los Angeles will be affected by the layoffs.
Hudson Pacific Properties acquired Quixote Studios for $360 million in 2022 but has faced significant operating losses, leading to the write-down of the entire value of the Quixote unit. Despite this setback, Hudson Pacific remains optimistic about the future prospects of the asset.
While the closure of Quixote Studios will result in cost savings of $21-$27 million annually, Hudson Pacific's Sunset Studios, which leases soundstages to Netflix and other production companies, remains unaffected and is currently 96% leased. The company will be relinquishing leased soundstages under the Quixote brand in various locations, with the exception of the Atwater Village facility.
Mark Lammas, president of Hudson Pacific, emphasized the company's strategic shift away from leased soundstages in less favorable markets to focus on higher-performing segments of its studio business. The decision to close the production services business in Atlanta aligns with the company's goal of concentrating its operations in Los Angeles and New York.
Victor Coleman, chairman and CEO of Hudson Pacific, highlighted the resilience of the Los Angeles and New York markets compared to secondary hubs like Atlanta, Chicago, Albuquerque, and New Orleans. The company's office portfolio, including properties leased to Netflix, remains a key focus for future growth.
As Hudson Pacific navigates the changes in its studio business, it continues to explore opportunities to optimize its assets and operations. The closure of Quixote Studios reflects a strategic realignment aimed at enhancing the company's financial and operational performance in the evolving entertainment industry landscape.