Valencia Studios, the longtime Santa Clarita production home of “NCIS,” the popular CBS drama, has been sold for $19.3 million. The full service independent television and film production facility at 26030 Avenue Hall and 28343 Avenue Crocker has been leased by CBS Television Studios and its predecessor company, CBS Paramount Television, for more than twenty years.
Valencia Studios contains a total of more than 121,000 square feet, including six sound stages ranging in size from 6,000 to 20,000 square feet, and 46,000 square feet of office and support space, with 22-24 foot minimum vertical clearance, adjustable lighting grids, and full air conditioning. The six-acre site also includes a small backlot street scene. The complex was bought by two limited liability entities, Valencia Holdings and Valencia Studio Group, formed by buyers Richard Reilly and Art Davis, according to CBRE Group Inc., which represented the sellers, Capital Foresight Limited Partnership and Valencia Studios NKG. The private buying partnership was represented by Jeffrey Andrew of Cushman & Wakefield Pacific and Jeffrey Tietzer.
“Entertainment is a growth industry, and with the different production platforms emerging, we expect to see continued strong demand for space,” said Reilly. “And Valencia has proven to be a very entertainment-friendly environment.”
“The City of Santa Clarita is extremely film-friendly, and we’ve seen a surge of film activity over the past five years,” said CBRE’s Craig Peters, who worked with Robert Valenziano on the sale. “With the State of California bringing back film and television tax incentives, we expect this trend to continue. Our industrial vacancy rate is approximately 1.6% within the Valencia market, so available production facilities are extremely difficult to come by. Valencia Studios is located within the Thirty Mile Zone as well, which is very valuable for production companies.”
Valencia Studios was founded in 1986 by former film student Robert Thompson to provide no-frills production space in what were then new industrial warehouse buildings. Thirty years later, the studio has been significantly upgraded, but is still a lower cost alternative to traditional Hollywood studios. It is one of 20 production facilities in the Santa Clarita Valley.
The emergence of streaming services and other content producers is putting a premium on studio space across Los Angeles County. Demand for space has spiked as online producers like Netflix and Amazon have ramped up investment in original programming. Between 2013 and 2015, Netflix and Amazon more than doubled their annual expenditure on programming, more than CBS, HBO, or Turner, according to London-based market analysts IHS Markit. Amazon’s spending jumped from $1.22 billion in 2013 to $2.67 billion in 2015, while Netflix spending rose from $2.38 billion to $4.91 billion in the same period. Only Disney ($11.84 billion) and NBC ($10.27 billion) spent more.
“The ‘secret’ of Valencia as a desirable filming destination has been out for years now, as it’s a cost-alternative to the major studios further south and in Hollywood,” said Valenziano. “The last available significant sound stage in the Valencia market has just been leased, which means there is essentially zero availability in this product sub-type.” He added “The real estate investment community has taken notice of the supply and demand imbalance within the studio and production space. As private and institutional capital competes for traditional core Southern California real estate investments such as residential and office properties in our rapidly appreciating market, historically low capitalization rates have caused investors to search for investment yield in other sub-types, and entertainment-related assets have been a very attractive investment alternative.”
“NCIS,” CBS’s top-rated drama, debuted in 2003. Season 14 began airing on Sept. 20 and the show has already been renewed for 2017-18. It was a spinoff of “JAG,” which was produced at the studio for 10 years. “NCIS is one of the top-rated shows on television, and we hope they’ll still in production in five years and beyond,” said Reilly. Prior to CBS, productions at the property have included “Divorce Court,” “The A-Team,” “Power Rangers,” “Moonlighting,” “The Two Jakes,” “Terminator 2,” and “Nightmare on Elm Street.”