CIM-Funded Expansion To Make Covington Studio One Of Georgia's Largest

A year after introducing Hollywood to Covington, Georgia, the owner of the Cinelease Studios-Three Ring, has secured financing for a massive expansion that will position the new production facility to be among the largest in Georgia.

Los Angeles-based CIM Group — the developer behind the multibillion-dollar redevelopment of the Gulch, called Centennial Yards, in Downtown Atlanta — has agreed to finance a $144M expansion of Cinelease Studios–Three Ring in Covington, 35 miles east of downtown, Bisnow has learned.

CIM provided a $72M loan to Three Ring's co-owners, Woodvale and Timber Hill Group, that will be used to recapitalize existing debt on the first phase of the project and to begin construction on the second phase, according to a press release released Thursday.

Three Ring's co-owners plan to add 144K SF of new soundstages, 93K SF of mill space, 70K SF of office space and 30K SF of storage, with construction slated to start in the first quarter. Once complete, Three Ring will reach nearly 570K SF, becoming one of the largest film and television production studios in Georgia.

The first phase of Three Ring opened in October 2020, with Woodvale and Timber Hill contracting with LA-based Cinelease Studios to manage the 50-acre campus. Eastdil Secured brokered the financing, the total amount of which was not disclosed.

Woodvale founder and Managing Partner Rahim Charania said the existing production facility has been full since opening and will be 100% occupied through next year, with Lionsgate Films, Paramount Pictures and Skydance Media recently filming there.

“I'm bullish because the consumer demand for content is the highest I've ever seen it. And this content needs to be developed somewhere,” Charania said. "The real estate market has not caught up to that demand." 

Demand for new content is driving studios and streaming services to produce new movies and shows at a blistering pace, which requires studio space. But in Georgia, despite the state's production facility development boom over the past decade, there isn't still enough dedicated production space at the moment, industry experts say.

Since 2010, when the state had only one 45K SF soundstage, developers have unleashed 2.1M SF in purpose-built stage facilities and another 3.2M SF in retrofitted facilities and warehouse spaces dedicated toward film and TV production, according to the state's film office.

During fiscal year 2020, the film and television industry spent $4B in the state, which included the production of 21 feature films, 222 episodic shows and 57 commercials, according to the Georgia Department of Economic Development. Georgia's tax incentives have helped it become a major production hub during the past decade; studios receive a 20% tax credit for productions of at least $500K and another 10% credit if Georgia's logo is used during the credits.

More than 50 feature films and TV or streaming series are being filmed in Georgia this month, including Black Panther: Wakanda Forever, Creed III, the fifth season of Cobra Kai and the 11th season of The Walking Dead.

Cinelease-Three Ring joins a group of developers seeking to meet the need. Trilith Studios — formerly Pinewood Atlanta Studios, co-owned by Chick-fil-A CEO Dan Cathy — announced late last year plans to expand its Fayette County hub into a massive mixed-use campus that will include 220K SF of new soundstages, new residential and retail space, and a hotel. Athens-area developers broke ground in November on a $60M, 350K SF production facility called Athena Studios near the University of Georgia. Commonwealth Asset Management plans to expand Blackhall Studios, which it purchased earlier this year, to a 3M SF production campus.

Last month, Capstone South Properties and Domain Capital Group announced plans to develop a 300K SF film studio called Electric Owl Studios near the Indian Creek MARTA station in Stone Mountain.

“We’ve experienced tremendous growth in production infrastructure in Georgia over the past decade, and the multitude of new platforms creating content means the numerous new stage and production spaces that are under construction couldn’t be coming at a better time,” Georgia Film Office Director Lee Thomas said in an email.

Despite the growing competition caused by additional production space, studio owners remain bullish that demand will continue to outstrip supply in Georgia, Raulet Property Partners partner Tyler Edgarton said. Raulet owns five production studios in Metro Atlanta.

“Everyone's 100% full. Going into January, it's overflowing,” Edgarton said. “And it feels sustainable currently. There's so much demand for content, and it's not easy to finance stages, so there are some restrictions on supply.”

Obtaining debt to build new studios remains a struggle given that many banks are averse to the unknowns associated with film and television production. There are few peers available for comparison and typical leases on studio spaces can last a few months or a year, Timber Hill founder Cary Goldman said.

“The biggest banks aren't in this business yet. But the smart and savvy debt funds are,” Goldman said. “We've been full since the day we were opened, and as a real estate guy, that's when you know it's time to expand.”

UPDATE, DEC. 2, 11:30 A.M. ET: This story has been updated to include additional information regarding CIM's loan.