The Fall Of Y'allywood: A Reckoning Comes For Georgia Studio Owners Amid Collapse In Film Production

Hollywood has dramatically scaled back the number of productions being filmed in Atlanta, leaving swaths of new studio space in the metro area quiet and owners scrambling to cover operating costs. 

“We got nothing right now,” Rooker Co. CEO John Rooker, who co-owns Atlanta Metro Studios in Union City, told Bisnow. “In my mind, this will be the longest we've ever been down, including when Covid hit.”

Direct spending by studios in Georgia for film and TV productions — the lifeblood of studio owners — dropped by 37% over the past year, according to the state film office. Outside of 2020, when shooting was largely shut down due to the pandemic, spending locally is at the lowest level since 2016, The Atlanta Journal-Constitution reported.

Just as demand has slumped, developers have pumped the market full of new supply. There is 4.5M SF of dedicated studio space in the state today, up from 3M SF in 2022. 

Georgia has grown to become a major center of film and television production on the back of the state’s generous tax credit. But Hollywood has slowed the output of its content production in the wake of strikes by the Screen Actors Guild-American Federation of Television and Radio Artists and the Writers Guild of America, with some moving productions overseas in pursuit of lower costs.

About 60% of Netflix and Amazon productions were being filmed in other countries, the LA Times reported in August. That decline has been felt across the U.S., but Georgia has been acutely affected.

Production companies are currently filming 30 TV shows and movies in Georgia, according to the state’s film office, more than 30% of which are reality TV, which is cheaper to make than scripted productions and doesn’t use as much studio space.

Where Georgia was once a stronghold for hosting Disney’s Marvel content, the studio has largely backed out of the state as it cuts back on its overall production output.

According to the film office, six feature films are shooting in Georgia, mostly through independent studios. Disney’s only feature film to shoot in Atlanta this year is a movie called Canon, according to the state film office. Sony also has one movie in production. 

Rooker said Marvel, which helped supercharge the local film scene by shooting multiple big-budget superhero movies in Atlanta, including two Avengers films, just wrapped a film at the studio in August. But now it’s quiet after another TV series that planned to film there decided to remain in Los Angeles. 

“We’re having a lot of conversations, but they’re all kind of looking at March of next year. I hope this isn’t the case, but it could be four or five more months before we see another show come in,” Rooker said. “It’s not fun right now.”

Newer studios have drawn business away from the older Georgia studios, said Charles Lynch, an independent producer in Louisiana who ran Pangaea Studios for a previous owner. The newer facilities are better designed to handle digital content.

In some cases, major film studios take long-term leases at a single property, such as Lionsgate at Great Point Studios in Douglasville, drawing business away from smaller, independent studio owners.

“I would not own a studio in Georgia right now,” Lynch said. “You have any product or service that there’s a huge demand for, it gets overbuilt and you end up with the situation we’re currently in. The supply completely outstrips demand.”

Glenn Murer owns Atlanta Filmworks Studios, but the property is likely in need of a rebrand.

It had been a bustling production hub, but activity never came back after last year's strikes. He said studios also got spooked when Georgia lawmakers eyed capping the state’s film tax credit earlier this year. Now, he is in talks to lease the entire 57K SF facility in Doraville to a company that plans to use the building for a purpose completely divorced from Hollywood.

“I don’t think it’ll ever be a studio again,” said Murer, a local industrial investor through his own firm Archive East Point. 

Rahim Charania, whose firm, Woodvale Commercial Real Estate, developed and owns Cinelease Studios - Three Ring in Covington, said his 570K SF studio campus is at 20% occupancy.

CIM Group, the LA firm that is developing Centennial Yards in Downtown Atlanta, refinanced the original loan on the property, one of the largest studio campuses in the state, for $72M in 2021. Charania said he and his co-owner continue to pay their debt service despite the slowdown in production.

“The high interest rate environment plus upcoming maturities and the lack of available alternative debt services has created distress in the market of which the media campus submarket is not immune,” Charania said. 

For some studio owners, the slump in business comes at a difficult financial time. Nearly $100M in loans tied to movie studios in Georgia are maturing by the end of 2026, according to a Bisnow analysis of mortgages in the real estate database Reonomy.

That includes the $19M loan backed by BlueStar Studios, a six-building campus at the former Fort Gillem in Forest Park, which has been put on the market for sale. 

BlueStar CEO Mark Parkman told the AJC the company was looking for a partner or new owner to “achieve our goals and maximize the remaining undeveloped assets that we have in any way possible.” Its loan matures December 2026.

BlueStar didn't return messages seeking comment about the loan. 

Rooker said he and his two co-owners at Atlanta Metro Studios managed to refinance an $18M loan that was set to mature in June for another six years.

Even if mortgage debt isn't an issue, studios cost owners money to operate even if there is no production paying to occupy the space, Rooker said. 

“When they’re not full, you got to essentially be putting cash away to cover the cost of these operations. That’s when people start getting in a pinch,” he said. “Most all of us studio folks build in some downtime” in the operations budget.

Despite the dampened lending environment for commercial real estate prompted by high interest rates, some lenders will still be willing to refinance studio properties owned by seasoned operators regardless of the production slump, said Glenn Brill, managing director of the real estate finance consulting firm FTI Consulting.

Georgia’s 20% tax credit for productions gives lenders a more compelling reason to bet on the long-term health of the state’s film industry, Brill said. The credit, which can go up to 30% if the production puts a Georgia logo on the credits, prompted film and TV production companies to spend $11B over the past three years in the state.

“Seasoned operators should be able to find money,” Brill said. “Production is always up and down, but the content is king. So if you want to be competitive [as a movie studio], you need to create product. That’s not going to go away.”

Charania said studio owners he knows are hopeful production will ramp up again in 2025, and Georgia is a good bet to catch that recovery, seeing as the state now has the second-most studio square footage in the nation behind Los Angeles and still has its generous tax credit.

“The combination of those two makes it hard to avoid Georgia as a place to do productions,” he said. “As the domestic production market increases, Georgia is always going to be a top-tier destination because of the tax credit.” 

Makiyn Hanna, a freelance lighting designer and technician, isn't as optimistic. He worked on Marvel's Guardians of the Galaxy and Hulu's Tell Me Lies, but jobs have dried up since the strike, with production companies shying away from paying the new, higher rates for talent.

He said his peers in the industry are hopeful Hollywood’s production pullback eases next year, driving more work to Georgia. 

“It’s mainly just hope,” Hanna said. “We don’t have any solid evidence of things coming.”