Hudson Pacific Streamlines Studio Portfolio with Atlanta and New Mexico Closures

Hudson Pacific Properties is closing Quixote soundstage operations in Atlanta and New Mexico to save $27M amid a production downturn and major staff layoffs.

By: AXL Media

Published: Apr 30, 2026, 10:21 AM EDT

Source: Bisnow

Strategic Shift in the Production Landscape

The decision marks a significant pivot for Hudson Pacific Properties (HPP), which acquired Quixote Studios for $360 million in 2022. By moving away from leased soundstages in markets currently facing structural cost disadvantages, HPP aims to stabilize its financial position. The wind-down process is scheduled to occur over the next several quarters. Leadership expects the consolidation to generate annual savings between $21 million and $27 million, providing a necessary cushion for the REIT’s primary office and high-performing studio assets.

Regional Downturns and Market Saturation

The move comes as recent data indicates a sharp decline in production activity within previously booming film hubs. In early 2026, Georgia saw an 11% year-over-year drop in film starts for January, while New Mexico experienced a more drastic 29% decline. These "structural demand disadvantages," as noted by HPP President Mark Lammas, have made maintaining leased facilities in these regions increasingly difficult. The shift reflects a wider industry trend where production companies are becoming more selective with budgets and locations following the explosive growth of the early 2020s.

TRANSFORMATIVE ANALYSIS: This retreat suggests that the "subsidy-driven" boom in secondary production hubs like Atlanta is reaching a point of saturation. While tax incentives initially drew massive investment, the high cost of maintaining leased physical infrastructure—as opposed to owning the land—has become a liability for REITs when production volume fluctuates. HPP's move to shed leased sites while retaining owned or high-demand assets indicates a shift from aggressive expansion to "defensive" asset management.

Impact on California Operations and Facilities