Sylmar Studios is setting the stage – or rather, six stages – for what some are hoping will be the comeback for the entertainment industry in Southern California.

Finalizing construction in August, Sylmar Studios, a 230,000-square-foot production studio, should be fully operational by November. Six sound stages, four production suites, 600 parking spots and 100,000 square feet of office space make up the purpose-built studio.

Sylmar Studios was born out of the high demand environment for sound stages as we came out of the pandemic.

Sam Glendon, CBRE’s Los Angeles North Region entertainment expert, remembers the “huge supply and demand imbalance at the time.”

“Rents skyrocketed, major streaming services were signing long-term leases, and suddenly, every large development site in L.A. seemed destined to become a studio,” he says.

But during the timeline of Sylmar Studios’ construction, the SoCal entertainment industry began seeing major shake ups from the 2023 SAG-AFTRA and Writers Guild strikes as well as increased interest in other markets. As a result, demand dissipated, and stages were left empty. In 2024, Los Angeles’ sound stages had an annual occupancy rate of 63%, according to FilmLA.

The tide could once again be turning and just in time for Sylmar Studios, given the recent legislation signed by Gov. Gavin Newsom in July which more than doubled the cap on the state’s film and television tax program.

Sylmar Studios President and General Manager Patrick Dempsey – no, not that Patrick Dempsey – calls the timing of this legislation and the finishing of construction an “odd, perfect storm.” He anticipates an uptick in Los Angeles production activity, which declined 6.2% during the second quarter of the year compared to the same time period last year, FilmLA reported.

“It only makes sense for this to be the obvious result since we have the best crew members in the world that reside here, the best equipment is here, and the facilities and infrastructure far surpass anything that’s anywhere else in the world,” he says. “We want to be a part of that equation and we’re looking forward to the coming months and seeing the effects of the new program. We’re feeling positive.”

Glendon echoes this sentiment, saying that because the L.A. area already has the best talent in the industry, this enhanced tax incentive makes it “far more competitive than it’s been.”

“This improved tax program may be the tipping point to bring runaway productions back home. I’ve already spoken with a few studio-operating clients, and they generally anticipate a recovery,” Glendon says, specifying that there will not be as intense of a boom as there was post pandemic but “things should be considerably better” than the last year-and-a-half.

Differentiating through technology

Once demand picks back up, Dempsey sees Sylmar Studios’ technological components as an advantage in the market. Having been in the business for 40 years, he says he has observed a dramatic evolution of the technological needs of studios.

“The technology and how this building is wired and our network is pretty fascinating,” Dempsey says. “When we have people up here, it’s something that they’re the most excited about because there’s so much flexibility.”

Sylmar Studios features backup generators, IDF rooms which can be used to manage data and are connected to every room in the building, cybersecurity components that guarantee no hacks, according to Dempsey, 40 gigabytes of bandwidth between fiber circuits and more.

Many of Los Angeles’ stages were the result of industrial warehouse conversions dating back to the 1960s, Glendon points out.

“With tight column spacing and low ceiling heights, (these studios) often cannot functionally work for some of today’s productions,” Glendon says. “L.A. has a lot of obsolete stages like these compared with other markets globally, so state of the art studios like those to be delivered at Sylmar Studios will certainly help L.A. be more competitive in that regard.”

Another point of differentiation is Sylmar Studios’ efforts to be “production friendly” – namely, giving crews the option to use their own equipment rather than mandating that they use the studio’s, Dempsey said. Even though this can lower revenue margins, he hopes the customer-service aspect will resonate with crews and be an attraction. 

“There’s a happy medium where you kind of have to meet (crews) halfway,” he says. “You’re there to run a business, but also to support a production, and it’s a creative process.”

While this offering is “not common practice,” it’s also “not unprecedented,” Glendon says. Finding avenues to ensure this doesn’t affect the bottom line too substantially will be key.

Dream projects

Based on Sylmar Studios’ size and configuration, Dempsey says it can accommodate two television shows and one feature film at a time.

Because the studio’s stages are interconnected and due to the manner in which the catwalks and permanent walkways are structured, it allows for easy transition across multiple sets for a television show. For example, this could be suitable for a hospital show needing to depict characters walking down the “hall” to another room in a seamless fashion.

The ideal television production for a studio is one with established success or undeniable potential, Dempsey says.

“Long term commitments from a long running show is a really great client to have,” Dempsey says. “You really get to work as a team. You know what they want. It’s very fluid.”

Financially, it’s obviously ideal for a studio to be at 100% capacity, but realistically, Dempsey sees 85% as a sweet spot for occupancy, adding that the studio can fill interim vacancies with commercials, music videos and musician rehearsals.

While having television clients is good for steady, long-term revenue, hosting a large feature film provides a sizable, immediate influx of capital.

“If a feature came in here, every day is totally different, but financially, it’s a great client to have because it’s a little bit more of a creative process,” Dempsey says. “From an artistic and production perspective, they use more lights. The days are longer, so they’re really consuming the services at the studio for a longer period of time, but it also lasts for a short period.”

Sylmar’s upside

On top of the increases to tax cuts for film and television production in California, Sylmar Studios will receive an additional 5% tax break because Sylmar is a designated Opportunity Zone, in addition to other bonuses.

“From a real estate perspective, you benefit from not having to go through certain entitlement processes and also for the investors, there’s tax benefits,” Dempsey said.

In line with the motivation behind incentives to bring business to Opportunity Zones, Dempsey says the studio’s presence will increase foot traffic to local businesses.

“We’ve already made an impact here. We’re definitely stimulating (local businesses’) revenue models pretty exponentially,” Dempsey said. “Just take this little (bakery) that’s across the street – that guy’s life is going to change.”

Additionally, they plan to provide opportunities for local partnerships. This includes creating a program with Los Angeles Mission College in Sylmar to show students studying film, media and production the behind-the-scenes of a high-end production. Sylmar Studios also plans to offer its spaces up for community events, emergency shelter, as a voting center and more.

While Sylmar is about 18 miles from Hollywood, it still lies within the 30-mile zone for local, Los Angeles production. Glendon points out that even with Sylmar’s distance from many parts of L.A. in terms of miles, when you account for traffic, it’s actually an easier commute for many people as opposed to other areas in the TMZ zone.

“While areas like the Arts District and Long Beach are technically within the TMZ, their distance from the heart of the industry, coupled with substantial rush hour traffic, makes them less competitive locations from an operational standpoint,” Glendon said. “It looks far on a map, but Sylmar is only 15 minutes from Burbank and Studio City.”

He also highlights Sylmar’s proximity to a number of industry support infrastructure such as equipment rental and costume suppliers, as well as industry professionals’ residences.

“A significant number of above-the-line talent, such as actors, directors, and producers, reside within a 30-minute commute of Sylmar given the area’s reverse commute traffic pattern,” Glendon says. “The North Los Angeles region is also home to a majority of the skilled ‘below the line’ entertainment industry workers.”