Hudson Pacific Properties Announces Studio Restructuring, Slashing Costs and Jobs
Key Takeaway: The company is winding down its Quixote Studios operations in Atlanta and exiting most leased sound stages in Los Angeles, aiming for annual savings of up to $27 million while cutting roughly 70 jobs.
Operational Changes
Quixote Studios will redeploy equipment and other assets from its Atlanta operations to Los Angeles and New York. The company is exiting leased sound stage facilities in Pacoima, Panorama City, and West Hollywood, which reported 53.3% occupancy last year. Quixote will retain its Atwater Village location in Los Angeles.
The following services will continue in New York and Los Angeles:
- Fleet rentals
- Lighting and grip equipment
- Production supplies
- Communications rental services
Financial and Employment Impact
- Approximately 70 positions will be eliminated between Atlanta and Los Angeles.
- The wind-down is expected to occur over the coming quarters.
- Hudson Pacific wrote down the entire value of its Quixote unit due to operating losses.
- Cost savings are anticipated to begin in the second half of 2025.
- The company will provide an update on its second-quarter earnings call scheduled for May 7.
Company Statements
Mark Lammas, President of Hudson Pacific, stated that the company has been working with Quixote’s leadership to streamline the business in alignment with commitments to capital discipline and portfolio quality. He added that the moves allow Hudson Pacific to focus financial and operational resources on its office portfolio and higher-performing segments of its studio business.
Victor Coleman, Chairman and CEO of Hudson Pacific, stated at a March investor conference that the Quixote acquisition "was not the best deal we’ve ever done" and that the company has "multiple alternatives with that asset."
Unaffected Operations
Hudson Pacific's separately owned studio portfolio, Sunset Studios, remains unaffected by these changes. The company reported that its flagship Hollywood stages are 96% leased and its newly delivered Manhattan stages are 100% leased. The company's office towers on Sunset Boulevard, leased to Netflix as its Los Angeles headquarters through 2031, are also unaffected.
Background and Context
Hudson Pacific acquired Quixote Studios in 2022 for $360 million. In 2023, the company closed Quixote's production services businesses in New Orleans and Albuquerque. The restructuring is part of a broader industry production slowdown that has affected secondary production hubs including Atlanta, Chicago, Albuquerque, and New Orleans.